Due to the huge, increasing institutional demand for cryptocurrencies over recent years, crypto asset managers have developed sophisticated channels to meet this interest in crypto exposure.
Bitwise, the world’s largest crypto index fund manager already has several index funds for the Bitcoin, Ethereum, and DeFi sectors.
Recently, they announced the Polygon fund, which provides customers with access to MATIC tokens.
The move was made in response to the demand for “specific exposure to very exciting assets, Bitwise CIO Matt Hougan added in a recent interview, also saying that Polygon is a “clear” choice for this.
What Is Polygon?
Polygon is a Layer2 scaling solution that seeks to solve the Ethereum congestion problem caused by increased traffic, which results in higher transaction charges and time. Polygon provides network scalability by allowing developers to build on the network, with over 3,000 dApps currently installed on the network. Network success was one of the main reasons for choosing Bitwise, Hougan said.
“It’s not for everyone, most investors, but an exposure to MATIC in the fund structure.”
Ethereum Is Booming in the NFT
The issue of Ethereum clogging is due to the booming DeFi and NFT sectors. It has expanded over the past year and Polygon’s popularity has skyrocketed. At the time of writing, the total amount locked to the network was $4.6 billion. As a result, MATIC tokens also experienced exponential growth of 56.3% last month. This emphasizes the reason for Bitwise’s “obvious” choice.
As the demand for single-asset funds increases, Hougan has confirmed that it will soon launch a single-coin asset fund related to DeFi from the next fund, to be released in November. He added:
“There seems to be a large audience trying to make certain bets on the individual assets of the DeFi space. I think we’ll keep repeating it there.”
As a company, DeFi already manages Uniswap and Aave funds with DeFi index funds, which have exposure to several DeFi assets.
The Cryptocurrency Fund may still be in demand, but the current focus is on ETFs as the first Bitcoin ETF hit the US market last week. Unsurprisingly, Bitwise has also applied for a Bitcoin futures-backed ETF and is awaiting approval. With the achievement of this milestone, many have been wondering what could come next. Hougan commented on this,
“I think it’s a reasonable expectation to imagine that both Bitwise and other companies will apply for Ethereum-based ETFs as the next step.”
Ethereum is an optimistic sign for the industry
Ethereum looks like a clear net choice, but the CIO explained that other altcoins have not yet been approved by the regulatory agency and may have to wait for a while. Currently, only Bitcoin and Ethereum futures are allowed to trade on CMEs under the supervision of CFTC, so it is unlikely that other Altcoins will receive their own ETFs. According to Hougan, this is an optimistic sign for the industry anyway.
“There are many real money investors who want to join the crypto ecosystem as they take advantage of these new asset classes and assets and categories. You will see this money flow into the room more.”
Polygon is the first, well-structured, easy-to-use platform for Ethereum scaling and infrastructure development. Polygon’s scaling solutions have also seen widespread adoption with over 450 Dapps, over 350M tokens, and around 13.5M distinct users.