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Bitwise successfully listed its 10 Crypto Index Fund, $BITW, on the OTCQX Best Market yesterday. Like $GBTC, it is a trust product but can be publicly traded like a security and is available to tax-advantaged accounts like 401(k). Is it a good buy? Look again!
1/ If you want to get exposure #Bitcoin 
, but cannot do so directly, it is better to buy $GBTC. Bitwise markets $BITW is an index fund, but it only tracks its own index- 10 Large Cap Crypto Index. If you want to have exposure to $BTC and Altcoins, there is another choice.
, but cannot do so directly, it is better to buy $GBTC. Bitwise markets $BITW is an index fund, but it only tracks its own index- 10 Large Cap Crypto Index. If you want to have exposure to $BTC and Altcoins, there is another choice.
2/ Grayscale offers a similar product with exposure to 5 cryptos called the Grayscale Digital Large Cap Fund, $GDLC. In terms of crypto exposure, $BITW is more attractive than $GLDC as it offers exposure to 5 more cryptos: Cardano, Chainlink, Stella, EOS and Tezos.
3/ In terms of management fees, $BITW’s 2.5% is lower than $GDLC’s 3%. However, as $BITW’s portfolio is rebalanced monthly, the resulting costs will weigh on the fund’s return. On the other hand, $GDLC’s portfolio is rebalanced quarterly.
4/ In terms of YTD performance, $GDLC performs better than $BITW (185% vs. 162%) in spite of its higher management fees partly because of less rebalancing events. Also, the other 5 Altcoins do not greatly affect the fund's performance much as it is <4% of the fund's composition.
5/ $BITW’s premium is much higher than $GDLC’s (80% v. 48%). You are paying much more for the underlying asset value of the cryptos if you choose $BITW over $GDLC.
6/ $BITW’s premium will continue to stay high as its shares are privately placed with accredited investors who can only sell them after 12 months. With limited supply of shares and growing investor interest, this will continue for a while.
7/ Although the lock-up period for $GDLC shares is the same for its accredited investors, $GLDC has more shares outstanding than $BITW (14.9M v 7M) as it has made a few private placements already. Therefore, $GDLC's premium is lower than $BITW's.
8/ On balance, $BITW is an interesting product that offers exposure to #Bitcoin and 9 Altcoins, but there is a better alternative if higher return is sought. But some percentage of $BITW allocated in one's portfolio won’t hurt.
and 9 Altcoins, but there is a better alternative if higher return is sought. But some percentage of $BITW allocated in one's portfolio won’t hurt.
