$10B asset manager registers new Bitcoin fund with SEC

Published at: July 24, 2021

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 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. The fund is part of an investment portfolio of Stone Ridge Trust, an open-end investment company registered in Delaware.

According to the prospectus, the fund’s primary investment objective is “capital appreciation.” The fund seeks exposure to Bitcoin via futures markets as opposed to spot purchases, as explained below:

“The Fund pursues its investment strategy primarily by investing in bitcoin futures contracts and in pooled investment vehicles that invest directly or indirectly in bitcoin (collectively, “bitcoin-related investments”). The Fund does not invest in bitcoin or other digital assets directly.”

The filing was made under SEC Form N-1A, which is required for establishing open-end management companies, including mutual funds. In terms of structure, the Fund is very similar to the NYDIG Bitcoin Strategy Fund II filed in May of this year.

In the prospectus, the fund states that it “expects to have significant holdings of cash, U.S. government securities, mortgage-backed securities” and other assets.

Regarding the fund's target exposure, the document states:

"The Fund seeks to invest in bitcoin-related investments so that the total value of the bitcoin to which the Fund has economic exposure is between 100% and 125% of the net assets of the Fund."

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 through NYDIG as part of its post-pandemic investment strategy. The timeline of the purchase coincided with the beginning of a seven-month uptrend for Bitcoin that would see its value peak near $65,000 in April.

Due to the growing appetite for digital assets, more institutional investors have gained exposure to Bitcoin over the past year, reflecting a broader acceptance by the mainstream. 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. For financial advisers, investing in Bitcoin no longer carries the same stigma it did a few years ago.

The Bitcoin price is in a clear uptrend this weekend, though analysts continue to warn of overhead resistance near $35,000. At the time of writing, BTC was up 6.5% to $34,230.