Editor's note: We are pleased to offer our readers our “3 Questions” column, where we chat with a thought leader within a unique sector of fintech and ask them to answer three to five questions about their company. We recently spoke with Matt Hougan of Bitwise Asset Management. Bitwise is a specialist crypto asset manager serving the financial advisor market.
NAME:
TITLE: Global Head of Research
COMPANY: Bitwise Asset Management
WEB ADDRESS: www.bitwiseinvestments.com
In addition to being global head of research for Bitwise Asset Management, creator of the world’s first and largest cryptocurrency index fund, Hougan is chairman of Inside ETFs, the world’s largest ETF conference, and is on the board of directors for Equbot, creator of the first AI-driven ETFs.
1. What does your firm do/offer within the fintech sector?
Our goal at Bitwise is to help financial advisors gain exposure to crypto.
On the surface, we do that by creating high-quality, simple and safe funds that hold the leading cryptoassets. Our flagship product, the Bitwise 10 Private Index Fund, holds the 10 largest cryptoassets weighted by market capitalization. You can think of it as the crypto equivalent of an S&P 500 fund. It protects you from the risk of betting on the wrong horse; the crypto equivalent of picking Myspace instead of Facebook.
But really, what we do is education. The crypto market is confusing. It’s full of hyperbole, and high-quality information is hard to come by. We serve as an institutional filter for the noise, helping advisors understand what’s real and what’s not in the crypto space. We do this by producing extensive materials --presentations, webinars, monthly updates, weekly updates, fact sheets, etc. -- so advisors can understand the role crypto can play in their portfolio, see the upside potential and the risks, and then answer any question their clients might have about the space.
2.What is your role within your firm and what do you do there on any given day?
I’m the global head of research. I spend most of my time studying the crypto markets. The crypto market changes fast, and we have to understand what’s going on and why, and be able to communicate that to advisors, so that they can communicate with clients in a way those clients will understand. We want to be the go-to resource for crypto for advisors across the U.S.
Beyond studying the market, writing about it and speaking about it with advisors, I also work on developing and maintaining our index methodology, and on our efforts to get a bitcoin ETF approved by the SEC.
3. What areas of fintech do you believe will grow the most in the coming 5 years?
Crypto and public blockchains are going after the largest addressable market in history – money. If they succeed, even a little, the growth potential is enormous.
4.What has been the biggest failure in your firm and how did you adapt?
We filed for a bitcoin ETF with the Securities and Exchange Commission this year and put an enormous amount of effort into working for approval. We submitted over 500 pages of original research, had eight meetings with the SEC, and received support from a large number of industry participants.
In the end, we did not get approved. We did, however, get great feedback from the Commission. They wrote a detailed, 112-page response to our application, asking good questions and asking for more data. So we’re back at, pursuing new research and business development activities with the goal of winning approval at a later date. In the meantime, we’ve redoubled our efforts to distribute our private funds, which exist today and are available to accredited investors.