Blockchain & Digital Assets

May 7, 2022

Ask Ric: Ways To Invest in Crypto Funds Like BITW

You Don’t Have To Be An Accredited Investor To Get Started

Michael from Rochester, NY: I've got a question about the fund BITW. I've got brokerage accounts with Edward Jones and JPMorgan Chase, and I want to invest in BITW, but it's not available through either one of those accounts. So I looked into BitwiseInvestments.com. But as I get further into the account application process, I see they require quite a large minimum investment.

Ric: $25,000.

Michael: Yes. And proof that you are an accredited investor. Several weeks ago, I heard on your show how you feel about such requirements, and I agree with that. I've never had such a difficult time making an investment.

Ric: So, yeah, I hope that Gary Gensler, the chair of the SEC, is listening to this right now. I mean, this is a classic example of the frustration that we all have in the crypto community. Investors wanting to invest in crypto and the cumbersome nature of the investment rules is frustrating investors for no effective purpose. And it's frankly all the SEC's fault because they have not said yes to a Bitcoin ETF. If they would say yes to an ETF, you'd be able to do this at your brokerage accounts at JPMorgan or anywhere else. You'd be able to do this very simply easily online with any discount broker.

And we all know ETFs. They're simple, easy to use. They're very low in cost, highly transparent, completely liquid. They're the most popular investment vehicle in America for all the good reasons. And yet the SEC has so far said, no, they're not going to allow a Bitcoin ETF to come onto the marketplace. Makes absolutely no sense. That leaves us to have to use other methodologies that the SEC does allow. These are alternative platforms that are frankly a lot more cumbersome. So there are two ways that you can access the Bitwise 10 Crypto Index Fund. That's what BITW is. BITW is the symbol, the ticker that if you wanted to go into a brokerage account to buy it, that's the symbol - BITW for the Bitwise 10 Crypto Index Fund. I'm a big fan of this fund and Bitwise. I'm an investor in both the Fund and in Bitwise itself.

The BITW is a fund that invests in the top 10 digital assets. Bitcoin and Ethereum are the two largest, and then there are eight others that are the next eight largest by market cap. These ten represent about 80% of the entire market of digital assets. So it's kind of like the S&P 500 of digital. So it's simple, easy to do. Bitwise does all the work for you of buying those coins, rebalancing them on a monthly basis. It's very simple and easy to deal with. There are two ways to go about buying it. Number one, as you noted, you can go directly to Bitwise, but if you do this, you have to be an accredited investor. This is because of the SEC rules. An accredited investor is somebody who has a $200,000 income, $300,000 if you're married or a net worth of $1,000,000. And you can't count your home in that math. Well, that means only the richest of Americans can qualify as an accredited investor. Only the richest Americans are able to buy the BITW investment directly from Bitwise.

And even if you do qualify, do you really want to invest $25,000? That's a lot of money in one investment. So even if you can buy it, you mean even if you're allowed to buy it as an accredited investor, that doesn't mean you want to invest that much money in a single one fund. So that's a turnoff and that is frankly a limiting issue for a lot of people. Now, if you're very wealthy, $25,000 no big deal. You can easily do it, and that describes the people who do invest in the fund directly from Bitwise. But what about everybody else? What about those who are not accredited or those who simply don't want to invest $25,000 all at once in a single investment? You can go to the brokerage community where you can buy BITW in the open marketplace.

Investing in BITW Through Your Brokerage Account

You don't need to be an accredited investor and you don't need to invest $25,000. You can invest 100 bucks if you feel like it. Very simple, very easy. The problem is the only way to do this in the open marketplace is to go through your brokerage account. And that means your brokerage firm has to have this investment on their list of available choices. And as you've described, between Edward Jones and JP Morgan, you're saying that they don't have it on their list and they're not going to let you buy it.

Well, then you need to go to a broker that will say yes, and I'll name one: Schwab. That's where I buy it. So open an account at Schwab, which you can do online, and you can just enter BITW in the transaction box and you can buy it just like you can buy any other stock. So simple, easy, very low investment amount, whatever amount you choose. No big deal. I'm amazed that big, huge firms like Edward Jones and JP Morgan are saying no to their customers. All they're doing is forcing you to go to their competitors. I don't get it. It's all the SEC's fault. And the firms need to have a Bitcoin ETF that they can make available to their clients. And in the meantime, until they do, they should simply make BITW available to you on their accounts. There's no reason for them not to. So if you can't get it at your brokerage firm, go to Schwab.com and buy it from them.

Michael: Well, thank you very much, Ric. I really appreciate that. That's great information and I'll do that.

Ric: Well, it's my pleasure. And by the way, if you're opening a brand new account at Schwab, if you're a brand new investor, they've got this really cool deal that I've in fact, talked about here on the show from time to time. Schwab, of course, is a sponsor here of this program. They offer a starter kit for people who are getting brand new into investing. Just go to Schwab.com/StarterKit.

Michael: Great. I will do that. Thank you very much.

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Jillian DelSignore

Global Head of Investor Distribution Strategy | Nasdaq Global Indexes

Jillian DelSignore, CIMA, is Global Head of Investor Distribution Strategy, Indexes at Nasdaq.

Prior to joining Nasdaq, Jillian was Head of ETFs & Indexing at FLX Distribution. FLX is a first of its kind technology platform that brings together asset managers, distribution professionals, wealth managers, and advisors.

Before and during her time at FLX, she was the Principal of Lakefront Advisory advising financial services firms on accelerating their growth through initiating, scaling or changing their distribution strategy. Given her depth of experience in the ETF industry, she also helps her clients demystify the ETF ecosystem by advising on the intricacies of that market.

Before starting Lakefront Advisory, Jillian was Head of ETF Distribution with J.P.Morgan’s Asset Management business. She was responsible for leading the sales and distribution efforts and strategy in the intermediary and institutional markets.

She also serves on the Board of Women in ETFs (WE), Inc, the first women’s group for the ETF industry, and served as Co-President from 2017-2019. Founded in 2014, WE achieves the mission to connect, support and inspire by organizing events globally that support our goals of education, networking, philanthropy.

Before joining J.P.Morgan in September 2015, Jillian was a Strategic Account Manager within BlackRock's iShares ETF Institutional Asset Management Group. She was responsible for developing and maintaining relationships with institutional investors, including boutique asset managers, global institutional asset managers, hedge funds and registered investment advisory firms.

Prior to joining iShares in March, 2009, Ms. DelSignore worked in the Independent Advisory Channel of Goldman Sachs Asset Management covering GSAM mutual funds, separate accounts, retirement plans, and alternative investments. She joined Goldman Sachs in 2005. Earlier, Ms. DelSignore worked in both the Institutional Corporate Cash and Global Bank Divisions at Federated Investors from 2000-2005.

Ms. DelSignore has a B.A. in Communications from John Carroll University and an M.B.A degree in Finance from the Katz Graduate School of Business at the University of Pittsburgh. She earned her CIMA designation from the Wharton School of Business at the University of Pennsylvania and holds the Series 3, 6, 7, 24 and 66 licenses.

Jillian DelSignore

Global Head of Investor Distribution Strategy | Nasdaq Global Indexes

Jillian DelSignore, CIMA, is Global Head of Investor Distribution Strategy, Indexes at Nasdaq.

Prior to joining Nasdaq, Jillian was Head of ETFs & Indexing at FLX Distribution. FLX is a first of its kind technology platform that brings together asset managers, distribution professionals, wealth managers, and advisors.

Before and during her time at FLX, she was the Principal of Lakefront Advisory advising financial services firms on accelerating their growth through initiating, scaling or changing their distribution strategy. Given her depth of experience in the ETF industry, she also helps her clients demystify the ETF ecosystem by advising on the intricacies of that market.

Before starting Lakefront Advisory, Jillian was Head of ETF Distribution with J.P.Morgan’s Asset Management business. She was responsible for leading the sales and distribution efforts and strategy in the intermediary and institutional markets.

She also serves on the Board of Women in ETFs (WE), Inc, the first women’s group for the ETF industry, and served as Co-President from 2017-2019. Founded in 2014, WE achieves the mission to connect, support and inspire by organizing events globally that support our goals of education, networking, philanthropy.

Before joining J.P.Morgan in September 2015, Jillian was a Strategic Account Manager within BlackRock's iShares ETF Institutional Asset Management Group. She was responsible for developing and maintaining relationships with institutional investors, including boutique asset managers, global institutional asset managers, hedge funds and registered investment advisory firms.

Prior to joining iShares in March, 2009, Ms. DelSignore worked in the Independent Advisory Channel of Goldman Sachs Asset Management covering GSAM mutual funds, separate accounts, retirement plans, and alternative investments. She joined Goldman Sachs in 2005. Earlier, Ms. DelSignore worked in both the Institutional Corporate Cash and Global Bank Divisions at Federated Investors from 2000-2005.

Ms. DelSignore has a B.A. in Communications from John Carroll University and an M.B.A degree in Finance from the Katz Graduate School of Business at the University of Pittsburgh. She earned her CIMA designation from the Wharton School of Business at the University of Pennsylvania and holds the Series 3, 6, 7, 24 and 66 licenses.

Tom Balcom CFP®, CAIA, MBA

Founder | 1650 Wealth Management

Tom began his career in the financial services industry in 1998, working at two of the nation’s largest brokerage firms. His passion for educating and protecting his clients’ wealth developed as he witnessed novice investors entrusting their life savings to “financial advisors” whose top priority was meeting their monthly sales quotas.

Tom aspired to differentiate himself from the crowd. He earned an MBA degree with a Specialization in Investments from the University of Miami in 2000 and became a fee-only, independent, registered investment advisor at a private wealth management firm in Miami. Tom earned the Certified Financial Planner (CFP®) designation in 2003 and the Chartered Alternative Investment Analyst (CAIA) designation in 2005.

In 2010, after gaining over a decade of private wealth management experience, Tom took his passion for educating and protecting his clients’ wealth and founded 1650 Wealth Management. 1650 Wealth Management is a fee-only, independent, private wealth management investment advisor. Tom neither sells investment products nor does he receive sales commissions. Tom focuses on actively managing and creating custom investment management strategies with the goal of protecting and growing his clients’ wealth.

Tom has spent a majority of his career studying and investing in alternative investments. He has spoken at numerous industry conferences including: Structured Products Americas Conference, MTN-I Structured Products Conference, Super Bowl of Indexing Conference, Innovative Alternative Strategies Conference, North American Structured Products Conference, Forum on Alternative Investments, Retail Alternative Investments, Private Wealth Southeast Forum, and the Financial Planning Association of Miami.

He is a contributing guest contributor for the Structured Products Daily publication and has been interviewed by top news and financial publications including: Bloomberg Businessweek, New York Times, CNBC, Investment News, Daily Business Review, CNNMoney.com, Registered Rep, SmartMoney, Forbes, Robb Report, Worth, Structured Retail Products, NerdWallet.com, SunSentinel.com, Florida Trend Magazine and the South Florida Business Journal.

He previously was as an adjunct professor within Barry University’s Personal Financial Planning program and in 2014, Tom was asked to serve as an expert witness on behalf of the Certified Financial Planner Board of Standards (CFP Board).

Originally from Nashua, New Hampshire, Tom has made South Florida his home for nearly 30 years. Tom and his family reside in Lighthouse Point, Florida. On the weekends, you may find Tom golfing (or attending his daughter’s junior golf tournaments), traveling, spending time with his family and actively supporting the University of Miami’s football and basketball teams.

Tom Balcom CFP®, CAIA, MBA

Founder | 1650 Wealth Management

Tom began his career in the financial services industry in 1998, working at two of the nation’s largest brokerage firms. His passion for educating and protecting his clients’ wealth developed as he witnessed novice investors entrusting their life savings to “financial advisors” whose top priority was meeting their monthly sales quotas.

Tom aspired to differentiate himself from the crowd. He earned an MBA degree with a Specialization in Investments from the University of Miami in 2000 and became a fee-only, independent, registered investment advisor at a private wealth management firm in Miami. Tom earned the Certified Financial Planner (CFP®) designation in 2003 and the Chartered Alternative Investment Analyst (CAIA) designation in 2005.

In 2010, after gaining over a decade of private wealth management experience, Tom took his passion for educating and protecting his clients’ wealth and founded 1650 Wealth Management. 1650 Wealth Management is a fee-only, independent, private wealth management investment advisor. Tom neither sells investment products nor does he receive sales commissions. Tom focuses on actively managing and creating custom investment management strategies with the goal of protecting and growing his clients’ wealth.

Tom has spent a majority of his career studying and investing in alternative investments. He has spoken at numerous industry conferences including: Structured Products Americas Conference, MTN-I Structured Products Conference, Super Bowl of Indexing Conference, Innovative Alternative Strategies Conference, North American Structured Products Conference, Forum on Alternative Investments, Retail Alternative Investments, Private Wealth Southeast Forum, and the Financial Planning Association of Miami.

He is a contributing guest contributor for the Structured Products Daily publication and has been interviewed by top news and financial publications including: Bloomberg Businessweek, New York Times, CNBC, Investment News, Daily Business Review, CNNMoney.com, Registered Rep, SmartMoney, Forbes, Robb Report, Worth, Structured Retail Products, NerdWallet.com, SunSentinel.com, Florida Trend Magazine and the South Florida Business Journal.

He previously was as an adjunct professor within Barry University’s Personal Financial Planning program and in 2014, Tom was asked to serve as an expert witness on behalf of the Certified Financial Planner Board of Standards (CFP Board).

Originally from Nashua, New Hampshire, Tom has made South Florida his home for nearly 30 years. Tom and his family reside in Lighthouse Point, Florida. On the weekends, you may find Tom golfing (or attending his daughter’s junior golf tournaments), traveling, spending time with his family and actively supporting the University of Miami’s football and basketball teams.

Tom Balcom CFP®, CAIA, MBA

Founder | 1650 Wealth Management

Tom began his career in the financial services industry in 1998, working at two of the nation’s largest brokerage firms. His passion for educating and protecting his clients’ wealth developed as he witnessed novice investors entrusting their life savings to “financial advisors” whose top priority was meeting their monthly sales quotas.

Tom aspired to differentiate himself from the crowd. He earned an MBA degree with a Specialization in Investments from the University of Miami in 2000 and became a fee-only, independent, registered investment advisor at a private wealth management firm in Miami. Tom earned the Certified Financial Planner (CFP®) designation in 2003 and the Chartered Alternative Investment Analyst (CAIA) designation in 2005.

In 2010, after gaining over a decade of private wealth management experience, Tom took his passion for educating and protecting his clients’ wealth and founded 1650 Wealth Management. 1650 Wealth Management is a fee-only, independent, private wealth management investment advisor. Tom neither sells investment products nor does he receive sales commissions. Tom focuses on actively managing and creating custom investment management strategies with the goal of protecting and growing his clients’ wealth.

Tom has spent a majority of his career studying and investing in alternative investments. He has spoken at numerous industry conferences including: Structured Products Americas Conference, MTN-I Structured Products Conference, Super Bowl of Indexing Conference, Innovative Alternative Strategies Conference, North American Structured Products Conference, Forum on Alternative Investments, Retail Alternative Investments, Private Wealth Southeast Forum, and the Financial Planning Association of Miami.

He is a contributing guest contributor for the Structured Products Daily publication and has been interviewed by top news and financial publications including: Bloomberg Businessweek, New York Times, CNBC, Investment News, Daily Business Review, CNNMoney.com, Registered Rep, SmartMoney, Forbes, Robb Report, Worth, Structured Retail Products, NerdWallet.com, SunSentinel.com, Florida Trend Magazine and the South Florida Business Journal.

He previously was as an adjunct professor within Barry University’s Personal Financial Planning program and in 2014, Tom was asked to serve as an expert witness on behalf of the Certified Financial Planner Board of Standards (CFP Board).

Originally from Nashua, New Hampshire, Tom has made South Florida his home for nearly 30 years. Tom and his family reside in Lighthouse Point, Florida. On the weekends, you may find Tom golfing (or attending his daughter’s junior golf tournaments), traveling, spending time with his family and actively supporting the University of Miami’s football and basketball teams.