Bitwise Asset Management, a prominent name in the crypto index fund space, has announced the formation of a dedicated active strategies team. This strategic move is driven by growing institutional demand for more sophisticated and diverse cryptocurrency investment products.
The newly established unit will be led by Jeffrey Park, who joined Bitwise in February. With over a decade of experience in research and portfolio management at alternative asset management firm Corbin Capital Partners, Park brings significant expertise to this leadership role.
Vincent Molino, who joined in May, will head operational due diligence for the active solutions team. His background includes due diligence roles at Northern Trust, Mercer, and EnTrustPermal. Denny Peng, a former risk manager at multi-strategy hedge fund complex Millennium Management, joined in September to complete the core team.
Why Bitwise Is Moving Into Active Management
The cryptocurrency market has evolved significantly since Bitwise launched the first-ever crypto index fund in 2017. As markets mature, new opportunities emerge beyond passive indexing strategies.
According to Jeffrey Park, "A new dimension of opportunity presents itself now as the market structure of liquid crypto has matured. We believe market-neutral, yield, arbitrage, and quantitative strategies can be combined with top-tier long-oriented approaches to create unique absolute return opportunities."
This strategic expansion allows Bitwise to offer institutional investors a more comprehensive suite of products that can potentially capitalize on market inefficiencies while maintaining lower volatility profiles.
Bitwise's Current Product Offerings
Bitwise has established itself as a leader in crypto index products. Their flagship Bitwise 10 Crypto Index Fund (BITW), launched in 2017, represents the first index fund of its kind in the cryptocurrency space. The fund undergoes monthly adjustments based on liquidity, regulatory status, and security metrics.
The current composition of BITW is dominated by Bitcoin (61%) and Ethereum (30%), with smaller allocations to Cardano, Solana, Polygon, and Polkadot. While the fund's net asset value has doubled since inception, its share price has declined approximately 60% since it began trading in December 2020.
Beyond their core index products, Bitwise has expanded into thematic offerings. In June, the firm partnered with Multicoin Capital and venture capitalist Matthew Ball to create a metaverse-focused index fund. More recently, they launched a Web3 ETF composed of public companies with Web3 exposure, such as Coinbase and Roblox.
Institutional Demand Driving Strategy Shift
The move into active strategies reflects broader institutional interest in cryptocurrency investments that go beyond simple market exposure. Institutions are increasingly seeking sophisticated approaches that can generate returns in various market conditions.
Matt Hougan, Bitwise Chief Investment Officer, noted that "crypto has historically moved in four-year cycles — with three years of rising prices and one year of drawdowns." He added that "amid this cycle's consolidation, many investors have quietly been doing their work and now perceive opportunity. We see higher-quality and stronger tailwinds than ever before."
The active strategies team will initially focus on multi-strategy absolute return solutions designed to capitalize on market inefficiencies while offering reduced volatility compared to direct cryptocurrency exposure.
The Future of Active Crypto Management
While Bitwise hasn't yet announced specific actively managed funds for public markets, the formation of this specialized team signals their commitment to expanding beyond index products. The firm currently manages approximately $1.3 billion in assets across various strategies offering exposure to blue-chip cryptoassets, DeFi, and NFTs.
This development represents a significant maturation in the cryptocurrency investment landscape, as established players expand their offerings to meet sophisticated institutional demand. 👉 Explore more strategies for navigating the evolving digital asset markets.
Frequently Asked Questions
What are active strategies in cryptocurrency investing?
Active strategies involve portfolio managers making specific investments with the goal of outperforming a market benchmark. In crypto, this might include arbitrage, market-neutral approaches, yield generation, or quantitative strategies that seek to capitalize on market inefficiencies.
How do active strategies differ from index funds?
While index funds aim to replicate the performance of a specific market index, active strategies attempt to generate excess returns through selective investment decisions and sophisticated trading approaches. Active management typically involves higher fees but offers the potential for better risk-adjusted returns.
Why are institutions interested in active crypto strategies?
Institutional investors often seek diversified approaches to cryptocurrency exposure that can potentially generate returns in both rising and falling markets. Active strategies can provide more sophisticated risk management and return potential compared to simple index tracking.
What types of active strategies might Bitwise offer?
Based on their announcements, Bitwise will likely focus on multi-strategy absolute return solutions that may include market-neutral approaches, yield generation, arbitrage opportunities, and quantitative strategies combined with long-oriented positions.
How established is Bitwise in the cryptocurrency space?
Bitwise launched the first crypto index fund in 2017 and currently manages approximately $1.3 billion in assets. They have expanded from basic index products to thematic offerings including DeFi, NFT, and Web3-focused investment vehicles.