Coinbase Partners With A US Asset Manager For A New Cryptocurrency Fund With Initial Pool of $500 Million

Even with Cryptocurrencies going through a bearish season, the market has managed to grow in its outreach. The ever-expanding space will soon have a crypto-focused fund, that will have the US largest cryptocurrency operator, Coinbase, collaborating with asset management firm Wilshire Phoenix.

The New York-based advisory firm has opted Coinbase’s extensive range of institutional product offerings, including Coinbase Custody, which was the exchange’s arm that signed the agreement. Initially, the fund will have a capital pool cap of $500 million and provides institutional grade exposure to Bitcoin.

Though not much details were divulged about the new investment vehicle, only thing disclosed is that it will employ a patent-pending approach to mitigate the risks arising from huge volatility or the current collapse in coin prices.

According to the official announcement, the new fund shall include features that will meet the investors’ regulatory and operational needs. This does not imply that the fund will hold Bitcoin or multiple cryptocurrencies directly. Moreover, the crypto fund will not employ derivatives or any form of leverage “to achieve its objective.”

This way, the fund is distinguished from an ETF and sets itself as a private placement investment that is sold to accredited investors, enabling them cryptocurrencies exposure in traditional financial accounts setting.

The General Manager of Coinbase Custody Trust, Sam McIngvale,  said:

“As a regulated Qualified Custodian and fiduciary, Coinbase Custody will not only offer Wilshire Phoenix clients’ secure storage for digital assets, but also the ability to perform GAAP-compliant audits whenever the need arises.”

“Coinbase Custody provides Wilshire Phoenix a best in class platform on which to securely store digital assets. They are steadfast in their commitment to implementing and executing solutions for institutional clients as opposed to merely talking about their future plans to do so.”