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Bitwise 10 Crypto Index Fund: Riding The Cryptocurrency Wave

Alexander J Poulos profile picture
Alexander J Poulos


  • The crypto boom continues with recent new highs posted in Bitcoin.
  • Ethereum has outperformed Bitcoin as alt coins gain further traction.
  • An index that offers broader exposure to the asset class has appeal.
  • The article below examines the case for the Bitwise 10 Crypto Index Fund.


Keeping with the theme of recent articles covering the Bitcoin (BTC-USD) Ecosystem, a pivot towards funds that operate in the space is warranted. Unlike the pure plays such as the Grayscale Bitcoin Trust (OTC:GBTC), a pure-play on the rise of BTC, or its chief rival the Grayscale Ethereum Trust (OTCQX:ETHE), the Bitwise 10 Crypto Index (BITW) offers investors a broader basket of Crypto. The concept has merit for investors as a unique way to profit from the next BTC. A broader basket's diversity has a few drawbacks that an investor needs to be comfortable with.

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Source: Bitwise

Fund Composition

The BITW fund's primary holding is BTC, with a 79% weighting in the fund with Ethereum up next with a 15% stake. The rest of the fund is earmarked towards a broad basket of smaller crypto players with the concept of having exposure in case one takes off and proves itself. During the previous bull cycle in BTC some alt-coins managed to thoroughly trounce the performance of BTC. I view the concept as a rising tide lifts all boat theory. The BITW concept, in my view, is valid-- however, some key drawbacks need to be addressed to gain a broader picture of the opportunity. The primary risk for individual investors is the premium built into the fund. BITW offers credited investors the opportunity to invest in the fund at net asset value (NAV), which has some broad appeal. I prefer to pivot into funds at NAV and detest paying premiums as I have seen premiums evaporate over time, affecting overall performance. For non-credited retail investors, which is the majority of the audience reading this piece, you have the pleasure of buying the index at the open market at a premium of over 100% of NAV. At the close on March 1st, 2021, the fund's NAV is 42.15, with a closing price on the open market of 104 per share. The premium here of over 110% to NAV

This article was written by

Alexander J Poulos profile picture
A long-time student of the game with extensive experience in trading both bull and bear markets. Leveraging the knowledge accrued over two decades of trading allowed me to profit from evolving economic conditions. My work can be seen at Valuentum.com as a healthcare analyst along with prior work on Seeking Alpha.

Analyst’s Disclosure: I am/we are long GBTC, ETHE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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