A US fund manager specialising in crypto assets has launched what it claims is the world’s first fund to focus on decentralised finance (DeFi).
Bitwise Asset Management already runs the $800 million BitWise 10 Crypto Index Fund and is now targetting the world of peer-to-peer digital lending, otherwise known as DeFi.
The BitWise DeFi Crypto Index fund, which is available to accredited investors via private placement, holds a portfolio of cryptoassets used in DeFi offerings and will track an index developed by BitWise.
The custodian for the fund is Anchorage Digital Bank which in January became the first digitally federated bank in the US.
According to the firm’s chief investment officer Matt Hougan, the rapid growth of the DeFi market is the main reason for the fund launch. There are currently decentralised trading venues handling over $30 billion of lending volume while the total estimated value of funds locked into DeFi-lreated conracts recently exceeded $40 billion.
Although it lags the US, the European DeFi market is growing, not least in the UK which makes up 12% of the total market for DeFi startups. However, market growth is currently held back by accessibility issues and the fact users can generally only use services via cryptocurrencies.
It also remains to be seen how EU regulators will attempt to supervise the market since publishing its proposed Markets in Crypto-Assets regulations in September.
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