The Bitwise Blue-Chip NFT Index Fund has been launched by the world’s largest crypto index fund manager, Bitwise Asset Management, with over $1.6 billion in assets under management. In the rapidly growing market for digital art and collectibles, the fund offers investors a simple, index-based approach to invest.
Investors can gain exposure to one of the world’s most established non-fungible token art collections by participating in this strategy.
What is NFT?
Cryptographic tokens or non-fungible tokens are cryptographic assets on the blockchain with a unique identification code and metadata that distinguish them from one another. Unlike cryptocurrencies, they cannot be traded or exchanged equitably.
Bitwise Blue-Chip NFT Index Fund:
Bitwise Blue-Chip NFT Index Fund provides diversified exposure to a totally new frontier of digital art and culture. In the arts & collectibles sector, the fund is designed to track an index of the most valuable (as measured by market capitalization) and well-established NFT collections. The Fund monitors collections that are considered for inclusion in the index for certain risks, selects and weights them based on an adjusted floor price market capitalization, and rebalances them quarterly.
As Bitwise stated in a press release, the Bitwise Blue-Chip NFT Index Fund is intended for investors interested in NFTs but with limited time to participate in regular auctions alongside bidding for art collectibles.
The fund was launched with ten of the most valuable NFT collections, such as CryptoPunks, Bored Apes, Fidenza, etc. These collections have a combined market capitalization of over $6 billion.
Apparently, Bitwise weighted the selected collections according to market capitalization in order to maximize liquidity and price discovery. Over $10 billion in NTF trading was recorded in the third quarter of 2021 alone, which led Bitwise to determine the need for a fund.
NFT’s Role in Crypto sector growth:
Hunter Horsley, the CEO of Bitwise, notes that NFTs have gained huge significance in the ongoing cryptocurrency growth. In the third quarter of 2021, the NFT trading volumes surpassed $10 billion. Meanwhile, Bitwise CIO Matt Hougan noted that investors should be aware of existing risks despite the launch. He mentioned the market’s infancy, volatility, liquidity and custody challenges as factors to watch for.
In addition to the NFT index fund, Bitwise has recently launched the Bitwise DeFi Index Fund and the Bitwise “ex Bitcoin” Index Fund. Private placement subscriptions to the fund are currently available for investors at $25,000 on the minimum investment. Monthly redemptions are available after the lock-up period.
