The Bitwise 10 Crypto Index Fund’s shares trade at 7.6 times the NAV of the basket of ten cryptocurrencies—Bitcoin, Ethereum and others—that underlie each share of the Bitwise Asset Management fund.
Market price, Net Asset Value (NAV), Assets Under Management (AUM), and trade volume for the Bitwise 10 Crypto Index Fund $BITW on December 16, 2020. pic.twitter.com/r6HvyJ9BIc
— Bitwise (@BitwiseInvest) December 16, 2020
On December 16, on the OTCQX over-the-counter market, the BITW ticker shares closed at $141. The NAV of the basket of ten cryptocurrencies underlying the fund was valued at $19.89. The company notes that the latest figure is recalculated hourly during the OTCQX trading session. The cap-weighted basket of the ten largest cryptocurrencies is reviewed monthly.
Source: Bitwise Investments.
Bloomberg noted that the premium of the fund price over NAV indicates that institutional and retail investors are willing to pay an exceptionally high premium for access to cryptocurrencies through a fund vehicle more familiar to them than direct asset purchases. Usually, this premium does not exceed 3%.
In an interview with Cointelegraph the Multicoin Capital managing partner Kyle Samani described those who buy this fund at such a premium as ignorant.
“I don’t think they can justify the premium. They don’t know what they are buying. It’s not warranted, it’s simply ignorance,” he said.
In the early days after the Bitwise fund was listed on OTCQX, proved to be more popular than Grayscale’s Ethereum Trust. Assets under management for Bitwise 10 Crypto Index Fund stood at $115 million (now $174 million) versus $1.6 billion in Grayscale Ethereum Trust.
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