Bitwise’s Bitcoin fund grew to just under $ 9 million last year. The fear of impending inflation is the main reason for this development.
San Francisco-based crypto management company Bitwise has more than doubled its fund since last year to just under $ 9 million. This comes from documents which the company filed with the Securities and Exchange Commission (SEC) in mid-September.
The Bitwise Bitcoin Fund is now almost two years old. It started in December 2018 with a capital of 153,400 US dollars. A year later, it was worth $ 4.1 million, and has grown by more than 26 times since it was launched.
The reason for this rapid increase in the Bitwise fund is primarily the fear of inflation as a result of US monetary policy during the corona pandemic. The Federal Reserve has already pumped $ 2.8 trillion into the economy. Congress is likely to give a $ 2.4 trillion incentive before the November US presidential election. Federal Reserve President Jerome Powell has also stated that he will tolerate inflation in excess of two percent for years to come. Many banks, including the European Central Bank (ECB), often see the two percent limit as a maximum for sound economic policy. Quite a few, therefore, expect a strong increase in value for Bitcoin in the long term.
Bitwise’s Bitcoin Fund enables investors from the traditional sector to participate in Bitcoin market events.
Its clientele is mainly composed of investors who oversee the assets of larger institutions. Matthew Hougan, Bitwise Global Head of Research, sees an increased demand for a hedge against inflation:
With the unprecedented expansion of the Federal Reserve’s balance sheet, the radical sums of fiscal stimulus, and the Fed’s new and distinctly deaf inflationary policy, [customers] are looking for a hedge
Hougan told the crypto news portal Coindesk
And also so as not to lose touch with her colleagues — the fear of missing out (FOMO) has struck again.
Other funds are also growing rapidly at the moment. The New York Digital Investment Group oversees more than $ 140 million in funds. The largest, however, is by far Grayscale: The asset manager bought another 17,100 Bitcoin this month. He thus has crypto assets with a total value of the equivalent of 5.8 billion US dollars. 2.6 percent of all Bitcoin in circulation can now be found in Grayscale’s Tulip Trust.