Bitwise Asset Management CEO Horsley on $70M raise: ‘we wanted to get some of the best minds’

on Jun 15, 2021
  • Bitwise creates crypto investment products compatible with existing workflows and infrastructure.
  • The index fund manager raised $70 million from several heavyweight investors, including Stanley Druckenmiller.
  • Their decentralized finance index fund derives 75% of revenue from cryptos.

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Dozens of Silicon Valley and Wall Street heavyweights participated in Bitwise Asset Management’s $70 million in Series B funding. Among them were Bridgewater CEO David McCormick, Stanley Druckenmiller, Henry Kravis, along with nearly 30 other individuals.

Bitwise, the cryptocurrency index fund manager, was founded four years ago and became a profitable company in 2021. The company now boasts $1.2 billion in managed assets at the end of the first quarter.

‘We wanted to get some of the best minds’

One of the primary objectives of raising $70 million in fresh capital was to bring new major shareholders, said CEO Hunter Horsley in an interview for CNBC. He noted:

We wanted to get some of the best minds, investors and backers across Wall Street and crypto involved with the company because we see an opportunity to build an enduring institution.

Some of the other large investors include former Federal Reserve Governor Kevin Warsh, D1 Chief Investment Officer Daniel Sundheim, Dan Loeb’s Third Point LLC, Louis Bacon’s Moore Strategic Ventures, Daniel Och’s Willoughby Capital, and Paul Eisenstein’s Vetamer Capital are among the new investors.

Growth outlook

Bitwise intends to use the funds to grow its sales team and develop its client service and research as well as strengthen its balance sheet. Since the beginning of this year, the size of those teams has doubled. The fund manager intends to double them again by the end of this year. Horsley said in a press release:

“Bitwise is focused on equipping investment professionals with the products, education and relationships they need to steward crypto and blockchain investments on behalf of their clients and LPs over the long run. This new round of capital will help us substantially grow our organization, expand our offerings, and cement our position as the premier crypto partner for professional investors.”

SEC is ‘very thoughtful’ on an ETF

One of the most popular funds managed by Bitwise tracks an index of ETH, BTC, LTC, and seven more of the biggest crypto assets. This year, Bitwise launched a crypto ETF and a decentralized finance index fund. The ETF holds 30 stocks. The respective companies have 75% of net assets in crypto or derive 75% of their revenue from it.

Horsley commented that Bitwise withdrew an application to oversee a Bitcoin ETF in 2020. But he hinted that a new application may be forthcoming as the regulatory environment is favorable. The Securities and Exchange Commission is “very thoughtful on the space” and “considering the right dimensions.” He added:

We’re spending time there, we’re optimistic one will be possible and we’ll file when we think the time is right.