Galaxy Digital Holdings Ltd., billionaire Mike Novogratz’s cryptocurrency merchant bank, is starting two new Bitcoin-based funds for accredited and institutional investors in the so-called “1%”, according to a report from Bloomberg.
Indeed, the billionaire–who will have his 55th birthday next week–is creating the funds for individuals whose demographic profiles seem to align with his own. The funds–named the Galaxy Bitcoin Fund and the Galaxy Institutional Bitcoin Fund–will be aimed toward “the wealth of America”–wealthy individuals between 50 and 80 years of age who may have been wary of investing in crypto in the past.
There’s certainly much potential in this wealthy market of mostly older individuals–according to a 2017 paper by economist Edward N. Wolff, the wealthiest 1 percent of American households own 40 percent of the country’s wealth.
While I am on record saying we need more redistribution and ‘pre-distribution’, I agree with Jamie Dimon, vilifying the rich does nothing to heal this country, is counter productive, and doesn’t engender the type cooperation we need to put this country back on solid ground. https://t.co/SF0lKsO612
— Michael Novogratz (@novogratz) November 10, 2019
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The Galaxy Bitcoin fund has a minimum investment of $25,000, and funds can only be withdrawn quarterly; the Institutional fund has a higher minimum buy-in and weekly liquidity. Bloomberg LP will act as the pricing agent. Custody will be provided by Bakkt and Fidelity Digital Assets.
Steve Kurz, head of asset management at Galaxy Digital, told Bloomberg that “the existing landscape for accessing Bitcoin is incomplete,” and that the company is “trying to offer secure service providers, low fees, [and] simple access to Bitcoin. We wanted to create something that could plug into the existing infrastructure.”
Bringing Bitcoin to older Americans may not be as difficult as it seems
Inviting these individuals into cryptocurrency markets could potentially prove to be beneficial for cryptocurrency markets, which have arguably remained largely untouched by investors over the age of 60.
However, despite BTC’s association with the millennial generation, the average Bitcoin investor may be older than what is widely perceived.
According to the Motley Fool, a survey commissioned by Grayscale that was published earlier this year revealed that “the average investor is 45 years old, and the average investor interested in bitcoin is 42.”
And indeed, Grayscale seems to have already begun to tap into this market of institutional and high-volume investors over 50–in 2013, the company launched the Grayscale Bitcoin Trust. However, Galaxy Digital’s new funds aim to be competitive with Grayscale with lower fees.