Australia’s first index-style cryptocurrency fund launched

Australia’s first index-style cryptocurrency fund launched

Fintech start up CoinJar, has launched Australia’s first index-style cryptocurrency fund, allowing wholesale investors to gain exposure to digital currencies without holding and trading the assets themselves.

Investing in cryptocurrency to date has been notoriously difficult with limited investment options for wholesale investors.

The CoinJar Digital Currency Fund (The Fund)1 takes on the management and security of the assets on behalf of the investor. The underlying cryptocurrency assets will be secured safely in multi-signature digital wallets which provide an additional layer of security for investors.

The Fund has two classes; Bitcoin Class, which provides exposure to Bitcoin (BTC) only; and Mixed Class, which aims to track the performance of four digital currencies, weighted by fixed supply – Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), and Litecoin (LTC).

Both classes of the Fund offer wholesale investors a convenient way to invest with Australian Dollars, which may provide diversification to traditional asset classes.

“Investing in cryptocurrency carries certain risks and can be an unnecessarily complex process. Traditionally, an individual investor in cryptocurrency has also been exposed to potential loss through cybercrime. We are launching the CoinJar Digital Currency Fund to handle the custody risks, simplify the investment process and provide industry best practice in security for wholesale investors,” said Jordan Michaelides, Head of Institutional at CoinJar.

“The Fund is unlocking an easier interface for wholesale investors to access a burgeoning and new asset class, which to date has been largely unavailable in familiar investment structures like unit trusts,” he continued.

Cryptocurrency has seen remarkable swings in price and extreme volatility over the last two years, providing investors with exceptional gains and losses compared to other asset classes.

Whilst it remains extremely volatile, Mr Michaelides views cryptocurrency as an effective way for investors to diversify their investment portfolios.

“Historically, digital currencies have provided alternative sources of capital growth with low correlations with traditional asset classes such as equities and fixed income,” said Mr Michaelides.

The release of the CoinJar Digital Currency Fund follows the launch of CoinJar Exchange, Australia’s fastest cryptocurrency trading exchange. The launch of both products in such a short period is indicative of CoinJar’s continued business expansion and diversification within the Australian market.

The CoinJar Digital Currency Fund has no establishment costs, contribution fees or performance fees. Management fees are 1.3% per annum for Bitcoin Class and 1.8% per annum for Mixed Class plus normal operating costs. Please refer to the Information Memorandum for more details.

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1 Issued by One CC Pty Ltd ACN 623 438 004 CAR 1261022 and managed by CoinJar Asset Management Pty Ltd ACN 625 772 769 CAR 1266305. Please refer to the Information Memorandum dated 1 August 2018 which is available upon request.