The Bitcoin Fund, which launched in late 2012, has returned 4,847% for the year through Nov. 18, according to Exante, a Malta-based brokerage.
Bitcoin is a virtual currency introduced in 2008 that uses peer-to-peer technology to facilitate instant (and untraceable) payments for an increasingly wide variety of products.
Exante, which is regulated by the Malta Financial Services Authority, reported that the Bitcoin Fund has $35 million under management.
Exante said that as the virtual currency has achieved its initial success, institutional investors and hedge fund managers have sought a regulated investment vehicle for Bitcoin placements.
The Bitcoin Fund offers investors secure, real-time access to the Bitcoin market, Exante said. The fund does not charge a performance fee, but does impose a management fee of 1.75%, as well as a 0.5% transaction fee.
According to Exante, the fund does not use leverage or derivatives for risk management, and there is no discretionary management. One fund share is strictly equal to the value of one bitcoin.
Exante also provides a secondary market for the trading of fund shares.
At present, some 12 million Bitcoins are in circulation, according to Blockchain.
The alternative currency has been extremely volatile this year. In November alone, for instance, prices started at about $200 and surged to more than $900 by midmonth.
The Bitcoin Fund’s value per unit as of Nov. 18 was $658, Exante said.
CoinDesk reported that Exante has company in the Bitcoin fund arena. SecondMarket, a New York firm, launched the private, open-end Bitcoin Investment Trust in September. The investment vehicle is based in the U.S., and is open to institutional and accredited individual investors.
SecondMarket also intends to facilitate two-way trading of the trust shares on its proprietary platform to enable both long and short positions, CoinDesk reported.
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