Galaxy Digital is launching ETH-based funds next month, according to investor docs. The company positions ETH as an asset with high growth potential.
Galaxy Digital is betting that 2021 will be the year of growing popularity of ETH among institutional investors. According to a document sent to Galaxy Digital customers, the company will launch ETH-focused products in mid-February. Galaxy Ethereum Fund will provide the company’s clients with access to ETH through a mechanism structured like a security.
The fund’s pricing will be based on the Bloomberg Galaxy Ethereum Index and its assets will be held by Gemini. Galaxy charges a management fee of 1% for investments over $ 100,000 and 1.25% for investments of less value. The minimum investment threshold for a fund is $ 25,000.
In addition to the Galaxy Ethereum Fund, the company will offer two organization-focused funds for offshore and non-offshore investors. For both of these funds, the management fee is 0.75% per annum for Class A shares and 1% for Class B shares.
The launch timing of the funds is noteworthy given that CME Group plans to launch Ethereum futures in February 2021. Galaxy funds and the upcoming CME futures product highlight the growing interest in ETH from institutional investors. According to Galaxy forecasts, ETH offers the opportunity for rapid investment growth.
“We view ETH as a growth asset. Investing in ETH is similar to investing in a basket of fast-growing technology stocks early on, enabling investors to capitalize on the explosive growth of smart contracts and next-generation decentralized applications, ”according to the document.
Galaxy noted the importance of the decentralized finance (DeFi) market: “Six applications of the decentralized finance industry are now worth more than $ 1 billion and generate up to $ 100 million in annual revenue.”
Earlier this month, Galaxy Digital announced the launch of financial services for miners and in-house mining, which it has been preparing since last fall.
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