Some important info on the new @BitwiseInvest crypto index fund that has just launched! The first crypto index fund that tracks the “Top 10”cryptos and gives US investors the opportunity to gain exposure via their brokerage accounts! A thread:

Index funds are a way for investors to easily invest in a “basket” of holdings with a “hands off” approach. The fund tracks the value of the assets inside and the investor gains exposure to a “diversified” portfolio of said assets in the sector. In this case, the Bitwise (cont.)

index fund is comprised of the top 10 crypto assets in the following proportions: You will note that the index is heavily weight towards the top three assets: $BTC, $ETH, and $XRP, with these three making up 94% of the asset allocation, and the remaining 7 assets (cont.)

comprising only 6%. It is also important to note, that the current market price that the index is trading at is at a nearly 100% premium to NAV (net asset value). This means that you are paying a nearly 100% premium to purchase shares of the index as opposed to purchasing (Cont.)

said assets directly. What this means is that if you have access to purchasing crypto directly, you are likely far better off going that route as you will get much more bang for your buck due to the premium that the Bitwise fund is currently trading at. However, there may (Cont.)

be some exceptions to this case. Because the Bitwise fund can be traded via brokerage accounts, investors may be able to gain exposure (via the fund) to crypto assets in tax-deferred retirement accounts. This is where paying the premium may actually make sense. That being (Cont.)

said, considering that 75% of the Bitwise fund is made up of $BTC, there may be better alternates to the fund at this time for those who want exposure to crypto via tax-deferred retirement accounts (IRA accounts). For example the @Grayscale Bitcoin trust ($GBTC) allows (Cont.)

investors to gain exposure to $BTC via brokerage accounts and currently only trades at a 15% premium. This is far less than the near 100% premium that the Bitwise index fund is trading at. The main difference here is that $GBTC only gives you exposure to #bitcoin whereas (Cont.)

the Bitwise fund gives you exposure to 9 other cryptos as well. Keeping in mind though that the Bitwise fund is 75% Bitcoin anyways- you have to ask yourself if it makes sense to pay a much higher premium for some exposure to the other 9 cryptos in the index fund. This (Cont.)

will come down to how valuable that diversification is for you and how much of a premium you are willing to pay for it. For most, it probably makes more sense to just buy $GBTC for now- however, those interested in a more diversified mix should keep an eye on the (Cont.)

Bitwise index fund (ticker $BITW), as the premium will fluctuate and at some point may come back down to earth, giving interested investors a chance to enter without paying a (potentially) exorbitant premium.