As Coinbase Custody continues toward its goal of being the world’s leading crypto-custodian, we want to highlight the innovative institutions that have chosen to join us on our journey. In this new series, we will dive into some of the companies that are helping to build the institutional cryptoeconomy, and get to know what makes them different and, importantly, how they’re thinking about the future of crypto.
Bitwise: A pioneer in the crypto asset management space.
Bitwise has been a leader in the world of cryptocurrency asset management ever since creating the world’s first cryptocurrency index fund, the Bitwise 10 Private Index Fund, in 2017. It serves a diverse set of investors, from family offices and financial advisors to pensions, endowments, foundations, and high net worth individuals.
One thing Bitwise clients have in common is that they are often new entrants into the cryptocurrency markets. “Most of our clients are making their very first crypto investments with us. We need to help get them comfortable with the idea of crypto as an investable asset class, and help them understand their options for how to implement in the safest ways possible. Working with a company like Coinbase Custody that has state of the art security, an impeccable reputation, and a regulated entity that provides custody services helps us build trust with our clients,” offered Bitwise’s Chief Operating Officer, Teddy Fusaro.
As part of their diligence, Bitwise clients need to understand not only a fund’s investment objective and performance profile, they also need to understand how it is operated, particularly since crypto works differently than traditional investable assets.
“Once an allocator decides to invest in crypto, they need to trust that the things they expect from their existing investments — auditability, credible third-party custody, operational best practices — are there for their crypto investments as well. We’ve built Bitwise from the ground up with this in mind, and it’s critical to us that our partners have too,” Fusaro added.
One example of this institutional-grade focus is asset insurance, an ever evolving issue that requires a lot of education for LPs and investors. All too often, it’s an unnecessary stumbling block for funds to invest in crypto. “It’s clear to me that there is a lot of confusion around cryptocurrency insurance,” offered Coinbase Chief Information Security Officer, Philip Martin, in a recent blog post. “Coinbase has held an insurance policy covering cryptocurrency in our hot storage systems continually since November 19, 2013. We currently hold a hot wallet policy with a $255 million limit placed by Lloyd’s registered broker Aon and sourced from a global group of US and UK insurance companies, including certain Lloyd’s of London syndicates,” he continued. “Lack of insurance simply shouldn’t be a limiting factor for institutional investors any longer.”
“At the end of the day, the most important thing that we build with our clients is trust — trust that we can deliver what we say we will in a way that is as safe and secure as possible,” continued Bitwise’s Fusaro.
“Our choice of partners is critical in this regard, particularly when it comes to crypto custody. It’s Bitwise’s goal to be the leading brand in crypto asset management and in order to do that we rely on other trusted leaders in the industry like Coinbase Custody. When we’re speaking with clients and prospective clients they need to know we’re providing them with a product that’s built on a team and partner ecosystem that’s simply beyond reproach. Coinbase is uniquely situated within the industry to help us build that trust with our clients.”
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