The appetite of large financial institutions for cryptocurrencies seems to have no end. Well, even if the price of Bitcoin has stagnated around $ 35,000, the crypto market is still boiling. With everyone’s attention moving towards Ethereum and other altcoins. For this reason, Mike Novogratz’s investment firm Galaxy Digital will launch an Ethereum-based investment fund. Increasing even more institutional participation in the market.
Institutional investment in cryptocurrencies
One of the main elements necessary for there to be institutional investors interested in investing in cryptocurrencies is the availability of financial instruments that facilitate this type of operation. Since buying and caring for millions of dollars in cryptocurrencies can be a cumbersome process.
This is the reason why the Grayscale company has become a critical part of Bitcoin’s last major bull rally. Since, it allows traditional financial institutions to invest in cryptocurrencies, without having to buy and store crypto assets directly. Work done by Grayscale, for which they receive substantial commissions.
However, not only Grayscale has worked to offer its clients the possibility of investing in cryptocurrencies. On the contrary, dozens of financial institutions are working on the creation of investment funds, derivatives and other products for the investment of crypto assets. Being Galaxy Digital’s Ethereum-based mutual fund, just the latest of these products. With which the firm of Mike Novogratz plans to redouble its bet in the crypto market.
An investment fund based on Ethereum
Thus, through a circular to its investors, Galaxy Digital has announced the creation of an investment fund based on Ethereum. It will be in the form of an index fund, and will base its price on the Bloomberg Galaxy Ethereum. Indicator created to track the price of ETH.
For its part, the security of the Ethereum that will be part of this investment fund will be in charge of Gemini, the company owned by the Winklevoss brothers. A minimum investment of $ 25,000 is required to enter the fund, with an operations commission of 1% for investors with funds greater than $ 100,000, and 1.25% for those who invest less than that amount.
«Galaxy Digital believes that Ethereum is an emerging substrate for programming and interacting with digital value, assets that we will see everywhere in the future (…) Six applications in the DeFi are worth more than $ 1 billion and generate hundreds of millions of dollars in earnings per year“Said Galaxy Digital.
At this time, Galaxy Digital has 815 million dollars in investments within the crypto market. But with this new investment fund based on Ethereum, they would redouble their bet on the crypto market. Expanding its investment portfolio, and probably positively impacting the demand for the crypto asset.