Stone Ridge Asset Management on Friday, revealed a new Bitcoin-focused investment strategy. The fund does not invest in bitcoin or other digital assets directly.
Revised York Digital Investment Group’s alternative investment manager, Stone Ridge Asset Management, has filed a new prospectus with the Securities and Exchange Commission, or SEC, to include Bitcoin (BTC) in its open-end mutual fund.
The prospectus for Stone Ridge Bitcoin Strategy Fund was posted on the Securities and Exchange Commission’s website on Friday, however, the real filing date is July 26, 2021. The Fund is part of Stone Ridge Trust’s investment portfolio, which is a Delaware-based open-end investment corporation.
The Stone Ridge Bitcoin Strategy Fund’s principal investment objective, according to the prospectus, is “capital appreciation.” As detailed below, the Fund seeks exposure to Bitcoin through futures markets rather than spot purchases:
“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 submission was submitted on SEC Form N-1A, which is required for open-end management businesses, such as mutual funds, to be established. The Fund is structured similarly to the New York Digital Investment Group, NYDIG Bitcoin Strategy Fund II, which was filed in May of this year.
The prospectus further states that the Fund “expects to have significant holdings of cash, US government securities, mortgage-backed securities, and other assets.”
According to the prospectus, the Fund’s objective exposure is as follows:
“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.”
Stone Ridge submitted a prospectus for its Diversified Alternatives Fund earlier this year, which planned to invest in Bitcoin and other alternative assets.
Stone Ridge purchased 10,000 BTC in October 2020 as part of its strategic investment effort, according to Cointelegraph. The purchase occurred at the start of an eight-month increase in Bitcoin’s value, which would culminate in a peak near $65,000 in May.
Over the last year, more institutional investors have been acquainted with Bitcoin, indicating widespread acceptance and growing hunger for digital assets.
Financial planners – a large category of specialists who are always looking for new investment vistas – may be driving the next wave of institutional adoption, according to Cointelegraph. From the perspective of career outcomes, the Bitcoin market has been greatly de-risked for financial advisers.
Although analysts continue to warn of overhead resistance near $35,000, the Bitcoin price is in a definite rally this weekend. BTC was up 6.5 percent to $34,230 at the time of writing.