World’s first crypto industry ETF met with sharp demand from investors seeking new exposure to the fast-growing space.
Bitwise Asset Management, the world’s leading crypto asset index fund manager, announced today that the Bitwise Crypto Industry Innovators ETF (NYSE: BITQ) has surpassed $100 million in assets under management less than six months after the fund’s May 11th inception. The milestone marks a significant step in the growth of the BITQ fund, the first crypto equities ETF with “pure play” exposure to the companies driving the fast-growing crypto economy.
Designed to offer investors a way to participate in the rise of crypto markets without the challenges of directly holding and having to choose cryptocurrencies, BITQ invests in companies that provide the core infrastructure and services necessary to trade, secure, or maintain crypto assets and their underlying platforms. At each rebalancing, at least 85% of BITQ’s holdings are firms that derive more than three-quarters of their revenue from crypto-related businesses (Tier 1 companies), with up to 15% of holdings reserved for more diversified companies making meaningful investments in the space (Tier 2). The fund’s performance has shown meaningful correlations to crypto asset prices but with less volatility than crypto assets themselves.1
“Many investors are turning to BITQ as the most direct way to gain ‘picks and shovels’ exposure to the booming crypto market,” said Matt Hougan, Chief Investment Officer of Bitwise Asset Management. “But these companies are also interesting investments in their own right: They’re pioneers in disruptive technology that are among the fastest-growing and most profitable companies in the world today.” According to a recent research paper, median annual revenue growth for Tier 1 constituents of the Bitwise Crypto Innovators 30 Index — the index on which BITQ is based — is 37 times that of the S&P 500 as a whole, with higher net margins.2
“Investors and advisors today see extraordinary opportunities in the crypto sector,” said Hunter Horsley, Chief Executive Officer of Bitwise Asset Management. "Our singular focus at Bitwise is helping them access the full range of opportunities emerging in the fast-growing space. We're excited to see BITQ hit this important milestone so quickly. As the first crypto industry equity ETF to scale the $100 million asset mark, it is proving another valuable tool for crypto investors."
Bitwise manages a growing suite of investment funds, including one of the largest crypto index funds. The firm focuses on partnering with investment professionals to help them and their clients understand and access crypto markets strategically. Today, Bitwise serves RIAs, multifamily offices, financial advisors, and other institutional managers.
Bitwise developed the Bitwise Crypto Innovators 30 Index on which BITQ is based with input from Moorgate Benchmarks, a London-based index calculation and benchmark administration company recently acquired by Morningstar, known for its deep expertise in the index space. Exchange Traded Concepts, an ETF platform provider, serves as the investment adviser to the BITQ fund, and SEI Investments Distribution Co., a provider of investment management services, is the fund’s distributor.
About Bitwise Asset Management
Based in San Francisco, Bitwise is one of the largest and fastest-growing crypto asset managers. As of October 15, 2021, Bitwise managed more than $1.5 billion across an expanding suite of investment solutions. The firm is known for managing the world’s largest crypto index fund and pioneering products spanning Bitcoin, Ethereum, DeFi, and crypto-focused equity indexes. Bitwise focuses on partnering with financial advisors and investment professionals to provide quality education and research. The team at Bitwise combines expertise in technology with decades of experience in traditional asset management and indexing, coming from firms including BlackRock, Blackstone, Facebook and Google, as well as the U.S. Attorney’s Office. Bitwise is backed by leading institutional investors and asset management executives, and has been profiled in Institutional Investor, CNBC, Barron’s, Bloomberg and The Wall Street Journal.
RISK DISCLOSURE AND IMPORTANT INFORMATION
Carefully consider the fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s full or summary prospectus, which may be obtained by visiting www.BITQETF.com. Investors should read it carefully before investing.
Investing involves risk, including the possible loss of principal. There is no guarantee or assurance that the methodology used to create the Index will result in the Fund achieving positive investment returns or outperforming other investment products. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index.
The Fund is non-diversified and will not invest in crypto assets directly or through the use of derivatives and also will not invest in initial coin offerings. The Fund may, however, have indirect exposure to crypto assets by virtue of its investments in Crypto Industry Innovators that use one or more crypto assets as part of their business activities or that hold crypto assets as proprietary investments. Diversification does not ensure a profit or guarantee against a loss.
In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments and investments in small companies typically exhibit higher volatility.
Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s shares and the possibility of significant losses. An investment in the fund involves a substantial degree of risk.
Certain of the Fund’s investments may be subject to the risks associated with investing in crypto assets, including cryptocurrencies and crypto tokens. Because crypto assets are a new technological innovation with a limited history, they are highly speculative asset. Future regulatory actions or policies may limit actions that can be taken with regard to crypto assets. The price of a crypto asset may be impacted by the transactions of a small number of holders of such crypto asset. Crypto assets may decline in popularity, acceptance or use, which may impact their price.
The technology relating to crypto assets and blockchain is new and developing. Currently, there are a limited number of publicly listed or quoted companies for which crypto asset and blockchain technology represents an attributable and significant revenue stream.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
Exchange Traded Concepts, LLC serves as the investment advisor of the fund. The Fund is distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.
1 Volatility is the statistical measure of how widely an asset’s returns fluctuate over a given time period.
2 Source: Data from FactSet, updated October 25, 2021. An earlier version of this analysis appeared in Bitwise Asset Management’s white paper, “Crypto Equities: A Picks and Shovels Approach to Investing in Bitcoin and Crypto” (Sept. 2021).
Frank Taylor / Ryan Dicovitsky, Dukas Linden Public Relations, Bitwise@DLPR.com