CoinJar, an Australian bitcoin exchange recently announced that it had launched the crypto index fund for wholesale investors in Australia. The announcement was made on Thursday. It says that CoinJar will create the CoinJar Digital Currency Fund. This will be a convenient way for wealthy Aussies to get exposure to crypto. Meanwhile, they will offload custodial responsibility to a third party.
About The Fund
This Digital Currency Fund will have two classes for the opulent in Australia. The first will be the Bitcoin Class; it will offer exclusive exposure for investors to BTC. The second one will be the mixed class. This will track the market cap-weighted price shifts of four of the six biggest crypto coins of ETH, BTC, XRP, and LTC.
According to the head of institutional at CoinJar, the process of investing in crypto comes with some risks. Besides that, he noted that it could be unnecessarily complex in some cases. He gave one example of risk as being cybercrime. In the past, many investors have lost funds or been at risk of making losses due to cybercriminals.
He added that the exchange was launching the CoinJar Digital Currency Fund to handle the issue of custody risks. Besides that, they would simplify the investment process and offer the best practices in the industry for security to major investors.
Who Can Access the Fund?
Right now, only the wholesale investors may access the fund. That means only the mega-rich of Australia can be allowed to invest in it. To do this, they need to gain certification and prove they have assets of not less than AUD 2.5 million. Alternatively, they need to have a gross of 250,000 Australian dollars for each of the past two years. This classification is quite similar to the accredited investor certification required in the US before taking part in a crypto fund. Some of the major ICOs being launched in the US are also asking for these conditions.
First times investors will need to contribute at least $50,000 to this fund. The existing investors will be able to make more investments in increments of $10,000. This fund will carry an annual management fee of 1.3% for the Bitcoin class and 1.8% for the mixed class.
Bitcoin Has Matured as a Mainstream Financial Asset
The CoinJar fund may be the first in Australia, but it is not the first crypto asset designed for major investors. Many products are being developed around crypto for the sophisticated investors. A good example is the Bitcoin Investment Trust (OTC: GBTC) which was launched by Grayscale in 2013. Since then, various other investment funds have been launched. The GBTC and the Ethereum Classic Investment (OTC: ETCG) are two such funds which can be bought by retail investors.
The derivatives market for crypto has also come a long way. There are now products such as options, future, and swaps offered on major exchanges such as CBOE and CME. Even upstarts such as Crypto Facilities and LEdgerX offer some of these derivatives.