Crypto Manager Bitwise Crosses $100 Million AUM Threshold 

Bitwise Asset Management is pushing ahead with an impressive 2020 as the firm recently announced that it crossed the $100m milestone. According to an official press release, the asset management firm recently hit the milestone, thanks largely to gains across its portfolio.

Riding the Institutional investment Wave  

Bitwise manages cryptocurrencies for investors. The company explained that it managed to hit the milestone thanks to its Bitwise 10 Crypto Index Fund, which tracks the ten largest digital assets. The firm also attributed the new milestone to increased institutional investment in digital assets. 

Matt Hougan, the company’s Chief Investment Officer, noted: 

“2020 is the year crypto crossed the chasm for professional investors. The challenges that historically kept professional investors on the sidelines—including regulatory concerns, custody, reputation, and understanding—are rapidly being swept aside.”

Hunter Horsley, the company’s chief executive, shared similar sentiments. As he explained, the crypto industry was filled primarily with individual investors when Bitwise came into the scene in 2017. However, the landscape is changing, and they appear to be benefiting from it. 

The milestone will come as comfort for Bitwise, which spent a significant part of 2019 trying to get the United States Securities and Exchange Commission (SEC) to approve its Bitcoin exchange-traded fund (ETF). Along with companies like VanEck, Wilshire Phoenix, and the Winklevoss’ Gemini Foundation, Bitwise submitted multiple applications to the agency for the instrument, which it belied would have helped improve investors’ appetite for the digital asset. 

Sadly, not one company passed through the agency. On more occasions than one, the SEC pointed out that ETF applications didn’t show a substantial investor protection level. The companies that didn’t get rejected eventually withdraw their applications in frustration. 

It’s unclear whether Bitwise will try again. However, WisdomTree, an asset manager and ETF specialist, filed an ETF application with the SEC in June. Perhaps they will get approval and open the floodgates for other companies to try their luck once more.

Gains for Everyone 

Bitwise’s milestone is also coming when many companies that invested in Bitcoin are seeing massive gains. Like the firm explained, 2020 has been the year of institutional investors. Most of these investors are now reaping the fruits of their investment in large numbers. 

MicroStrategy, a cloud-based business intelligence solution provider, became one of the largest institutional investors this year, committing as much as $425 million of its assets to Bitcoin by last month. In its financial results for Q3 2020, the company reported positive numbers, as earnings per share, subscription revenues, and non-GAAP operating margins all grew.

The firm’s Bitcoin bet paid off as well. Data from independent crypto researcher Kevin Rooke showed that MicroStrategy had earned $100 million from its Bitcoin commitment so far, as its holdings are now valued at $525 million. The analyst pointed out that the Bitcoin bet has so far made more money for the firm than its core business did in the past three years.