Investors seeking professionally-managed exposure to cryptocurrencies and digital assets will soon be able to do so via DigitalX’s (ASX: DCC) new Bitcoin Fund with the Company already possessing a significant holding of 413 Bitcoins (BTC), currently valued at a total of $5.28m.
The new fund will available to sophisticated investors and family offices under a standard unlisted fund structure with DigitalX to seed the fund with 215 of its current BTC holdings, valued at $2.75m.
1 BTC currently trades around A $12,800.
“DigitalX has held its bitcoin position through the 2017 bull market and 2018 drawdown because of our fundamental long-term belief in the value of the asset,” said Executive Director Leigh Travers.
“What has become more and more apparent to us as we speak to investors and market participants generally, is that there is a growing interest in accessing bitcoin from people who have traditionally not considered investment in digital assets.”
At it’s all-time high in December 2017, the price of 1 BTC reached $26,500 before dropping back down to $8,800 just one month later, highlighting one of the most volatile times in cryptocurrency markets when regulation was minimal.
From November 25, DigitalX will commence meeting with prospective investors in Sydney, Melbourne and Perth to promote the fund which will operate with a 1.65% management fee and no performance fees.
Unlike traditional equities markets, regulation around cryptocurrency is still in its infancy. Thanks in part to its decentralised nature where trade takes place on global exchanges 24/7, leading to volatile fluctuations around newsflow events.
In Australia, investors can refer to ASIC Information Sheet 225 on crypto-assets from May 2019.
In recent years, the cryptocurrency market has been the target of highly sophisticated security attacks and hacks. The blockchain element behind cryptocurrency can make post-hack recovery impossible, thus investors do not have the same investor protection protocols as traditional equity markets.
The DigitalX Bitcoin Fund will be held in highest-grade wallet security system available through provider ‘BitGo’ which is insured up to US$100m.