Cryptocurrency asset management firm Altonomy today launched its crypto index fund, the Altonomy Taurus Index Fund, which targets investors looking to get in on cryptocurrencies without having to bet on a single coin.
Altonomy is trying to make crypto-investing as easy as buying the S&P 500 through an OTC sell-side trading desk and a new “broker-dealer” model.
Altonomy Taurus Index Fund provides a way to track the performance of the crypto markets as a whole by holding a single crypto asset. Index funds have consistently beaten the average managed fund since their inception.
The initiative is part of the company’s recent move to target a more select group of high-stakes players and institutional investors.
In that respect, it will be less similar to an ETF and more like the private placement investments which are sold to accredited investors to enable them to have exposure to cryptocurrencies in traditional financial accounts.
The launch of the new fund is the latest investment vehicle to emerge in the cryptocurrency space. Just last month, Australian cryptocurrency exchange CoinJar launched an index fund targeting wholesale investor, dubbed “The CoinJar Digital Currency Fund.” In order to qualify, an investor must have net assets of no less than AUD$2.5 million or have had a gross income of AUD$250,000 for the last two years.
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In addition, the popular crypto exchange app Coinbase announced in July that it will soon be offering a crypto index fund to accredited US investors.
Growing interest among institutional investors
Altonomy said there are benefits to an index fund. It costs less than a hedge fund and is easier to follow as it simply tracks an index of the top cryptocurrencies. It also helps diversify the investment, while guaranteeing the safety of investing with a U.S.-registered and fully regulated fund.
The fund also comes at the time when mainstream interest in cryptocurrencies is skyrocketing. A recent Thomson Reuters study showed that 20 percent of 400 finance firms surveyed are considering getting into cryptocurrency trading within the next 12 months.
The lack of professional trading venues for cryptocurrencies, however, has acted as a barrier for institutional investors seeking entry into the digital currency landscape.
“Before founding Altonomy, we saw a huge need for a dedicated OTC sell-side trading desk in order to provide ICO issuers and crypto hedge funds more liquid trading options,” said Ricky Li, co-founder of Altonomy.
He added: “Until now, there hasn’t been an independent, sell-side trading desk to provide effective crypto asset and liquidity management services. Altonomy fills this gap by consistently delivering the most favorable spreads in OTC markets given time and liquidity constraints for different token dynamics, even long-tail ones, in highly volatile markets.”