Big News in the Crypto World
It’s a somber week for crypto enthusiasts as Stone Ridge Asset Management has announced the liquidation of its Bitcoin Strategy Fund. Yes, that’s right! The fund, which was likened to a shiny new coin in the realm of finance back in July 2021, is now preparing for its final curtain call. Don’t worry, this isn’t some dramatic plot twist from a financial thriller, but it’s still pretty significant.
Details of the Liquidation
According to a filing with the U.S. Securities and Exchange Commission (SEC), the board of trustees for Stone Ridge Trust approved the plan to dissolve its Bitcoin Strategy Fund last Friday. The firm plans to continue operating the fund until October 3, after which they will liquidate assets and distribute cash to shareholders. Mark your calendars because the liquidation is anticipated to be complete around October 21, 2022!
The Purpose Behind the Fund
Originally, this fund aimed to provide investors with exposure to Bitcoin through futures markets, as the SEC hadn’t yet given the green light for spot investments. The grand idea was to achieve capital appreciation, and if fortune favored the bold, it would result in some sweet crypto profits!
Asset Allocation and Current State
As strange as it sounds, at the time of this announcement, the fund had about $2.8 million in net assets. Back in its semi-annual report from April 2022, more than half of the funds were allocated to foreign government agency bonds — not exactly what you’d expect in a crypto strategy, right? The fund’s total net assets then tallied to over $10.9 million; talk about an awkward investment party!
History of Stone Ridge and Bitcoin
Stone Ridge is no stranger to Bitcoin. In a move that turned heads back in October 2020, the firm purchased a whopping 10,000 BTC through the New York Digital Investment Group (NYDIG), firmly securing its place among the largest private holders of Bitcoin. Talk about some serious HODLing! At the time of this writing, Bitcoin is priced at $22,230, reaching a three-week high. The irony of such a high price while selling off assets isn’t lost on us.
What’s Next for Investors?
What does all of this mean for investors? The change signals a shift in strategy for many. Those looking to get involved in crypto investing might instead explore other avenues now that this particular fund is closing its doors. With Bitcoin making headlines, there may still be opportunities lurking just beyond the surface. In the fast-moving world of cryptocurrency, getting involved feels like surfing a wave — thrilling, sometimes scary, but always an adventure!
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