The parent company of New York Digital Investment Group (NYDIG), Stone Ridge Asset Management, has been actively pursuing new investment options for Bitcoin. On Friday, Stone Ridge’s open-end mutual fund announced a new Bitcoin-centric investment strategy.
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Stone Ridge Asset Management has filed a new prospectus with the US Securities and Exchange Commission (SEC) to add Bitcoin to its open-end mutual fund.
The prospectus for Stone Ridge Bitcoin Strategy Fund was uploaded on the SEC site on Friday, but the actual filing is dated July 26, 2021. The Fund is part of an investment portfolio of Stone Ridge Trust, an open-end investment company.
Per the prospectus, the main purpose of the firm’s strategy is “capital appreciation.” The Fund is looking for exposure to Bitcoin via derivatives, or futures markets as opposed to spot purchases. While the asset manager has made bitcoin purchases in the past as part of its treasury reserve strategy, this latest move is not necessarily ‘bullish’ for bitcoin.
The Fund pursues its investment strategy primarily by investing in bitcoin futures contracts and in pooled investment vehicles that invest directly or indirectly in bitcoin (collectively, ‘bitcoin-related investments’). The Fund does not invest in bitcoin or other digital assets directly.
The filing was made under SEC Form N-1A, which is necessary for legal compliance. Structure-wise, the Fund is very similar to the NYDIG Bitcoin Strategy Fund II filed in May of this year.
The prospectus further explains that the Fund “expects to have significant holdings of cash, U.S. government securities, mortgage-backed securities ” and other assets.
With regards to the Fund’s target exposure, the document reads:
The Fund seeks to invest in bitcoin-related investments so that the total value of the bitcoin to which the Fund has economic exposure is between 100% and 125% of the net assets of the Fund.
Earlier this year, Stone Ridge filed a prospectus for its Diversified Alternatives Fund, which aimed to gain exposure to bitcoin and alternative assets.
As reported last year, Stone Ridge purchased 10,000 BTC in October 2020 through NYDIG as part of its post-pandemic investment strategy. The purchase coincided with the beginning of a 7-month uptrend that would take the coin to $65,000 in April.
Over the year, more institutional investors have gained exposure to Bitcoin, reflecting steady mainstream acceptance and a growing appetite for the digitally scarce asset. For registered financial advisers, investing in Bitcoin no longer carries the same stigma it did a few years ago.
Bitcoin reached a price of $39,900 in early Monday morning trading hours, up over 13% within 24 hours.
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