Bitwise Bitcoin Fund Doubles AUM to $9 Million as Accredited Investors Look to Hedge for Inflation
Crypto asset management firm, Bitwise Bitcoin Fund, has doubled its Assets Under Management (AUM) within the past year, according to the latest filing with the U.S Securities Exchange Commission (SEC). This U.S domiciled entity is only two years but has managed to gather close to $9 million from accredited investors looking for Bitcoin exposure.
The amended filing revealed that a total of 43 investors were on board, with a minimum contribution amount capped at $3,950. The figure jumped significantly within the past year, a shift that has since been attributed to inflation-hedging. The head of research at Bitwise, Matthew Hougan, told Coindesk in an email that the Fed’s balance sheet expansion in recent months has been favorable to them,
“With the unprecedented expansion of the Fed’s balance sheet, the radical amounts of fiscal stimulus, and the Fed’s new and significantly more dovish inflation policy, [Bitwise clients] are looking for a hedge.”
Hougan also said that Bitcoin is the most efficient inflation hedge in today’s market, hence the growing clout from accredited investors. However, the most active Bitwise clients as of now are financial advisors seeking to leverage Bitwise’s Bitcoin exposure to grow their clients’ portfolios or hedge against inflation. Hougan noted,
“A year ago, advisors were mostly interested in learning about crypto; now, they're actually starting to invest. A year ago, advisors were making small personal investments in our funds; now they're allocating 1%, 2%, or more across all of their client portfolios.”
Hougan was also keen to mention that financial advisors are starting to realize it is much easier to strike while the iron is still hot instead of playing catch up. Consequently, they are now preparing for the future; a timeline that Hougan speculates to be as soon as the next 12 months given the action by institutions and shifting macroeconomic dynamics.
With a second U.S stimulus in the debate, inflation hedging with Bitcoin will probably continue to increase based on its capped supply of 21 million coins. On the contrary, governments can print infinite money leading to crazy inflation levels and automatic loss of purchasing power.
It is this speculation that has seen the likes of Nasdaq listed MicroStrategy allocate around $425 million of its balance sheet towards BTC as an asset to hedge for inflation. Other industry giants with significant AUM include Grayscale investments, which currently manage an AUM of $5.8 billion.