They have been actively looking for new investment vehicles for Bitcoin. Stone Ridge's open end mutual fund unveiled a new strategy for investing in Bitcoin on Friday.
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. Stone Ridge Trust is an open-end Delaware investment company that includes the Fund.
According to the prospectus Stone Ridge Bitcoin Strategy Fund's primary investment objective is "capital appreciation". The Fund seeks to expose to Bitcoin via futures markets rather than spot purchases.
The Fund invests primarily in bitcoin futures contracts, and in pooled investments vehicles that invest directly or in indirect bitcoin (collectively "bitcoin-related investment") The Fund does NOT invest directly in bitcoin or any other digital assets.
This filing was done under SEC Form N-1A. This is required to establish open-end management companies and mutual funds. In terms of structure, the Fund is very similar to the NYDIG Bitcoin Strategy Fund II filed in May of this year.
The prospectus further explains that the Fund "expects significant holdings of cash and U.S. Government Securities, Mortgage-backed Securities, and other assets."
The prospectus provides the following information regarding the Fund's target exposure:
The Fund invests in bitcoin-related investments to ensure that the Fund's total bitcoin exposure equals between 100% and 125%.
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 purchase occurred at the start of a eight-month uptrend in Bitcoin, which would see it reach $65,000 by May.
Over the past year, more institutional investors have been exposed to Bitcoin. This is a reflection of widespread acceptance and growing demand 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. The Bitcoin market is significantly less risky for financial advisors in terms of their career prospects.
The Bitcoin price is in a clear uptrend this weekend, though analysts continue to warn of overhead resistance near $35,000. BTC was at $34,230 as of the time this article was written.