$10B asset manager registers new Bitcoin fund with SEC

Stone Ridge Asset Management, the parent company of New York Digital Investment Group, or NYDIG, has been actively pursuing new investment vehicles for Bitcoin. On Friday, Stone Ridge’s open-end mutual fund revealed a new Bitcoin-focused investment strategy.

Stone Ridge Asset Management, the alternative investment manager behind New York Digital Investment Group, has filed a new prospectus with the United States Securities and Exchange Commission, or SEC, to add Bitcoin (BTC) to its open-end mutual fund. 

The prospectus for Stone Ridge Bitcoin Strategy Fund appeared on the SEC website on Friday, though 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 registered in Delaware.

According to the prospectus, the primary investment objective of the Stone Ridge Bitcoin Strategy Fund is “capital appreciation.” The Fund seeks exposure to Bitcoin via futures markets as opposed to spot purchases, as explained below:

“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 required for establishing open-end management companies, including mutual funds. In terms of structure, the Fund is very similar to the NYDIG Bitcoin Strategy Fund II filed in May of this year.

It is further explained in the prospectus that the Fund “expects to have significant holdings of cash, U.S. government securities, mortgage-backed securities” and other assets.

Regarding the Fund’s target exposure, the prospectus states:

“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 sought exposure to Bitcoin and other alternative assets.

As Cointelegraph reported, Stone Ridge purchased 10,000 BTC in October 2020 as part of its strategic investment initiative. The timeline of the purchase coincided with the beginning of an eight-month uptrend for Bitcoin that would see its value peak near $65,000 in May. 

Related: NYDIG set to bring Bitcoin adoption to 650 US banks and credit unions

More institutional investors have gained exposure to Bitcoin over the past year, reflecting broad mainstream acceptance and a growing appetite for digital assets. As Cointelegraph reported, the next wave of institutional adoption could be driven by financial advisers – a broad category of professionals who are always looking for new investment horizons. For financial advisers, the Bitcoin market has been significantly de-risked from the perspective of career outcomes. 

The Bitcoin price is in a clear uptrend this weekend, though analysts continue to warn of overhead resistance near $35,000. At the time of writing, BTC was up 6.5% to $34,230.

Related: Bitcoin price hints at ‘megaphone’ bottom pattern, and a breakout toward $40K