Xapo Bank, in collaboration with Hilbert Capital, the asset management division of the Swedish investment entity Hilbert Group (HILB), is set to manage a hedge fund denominated in Bitcoin (BTC) with an initial capitalization of $200 million. This venture, slated for a September launch, is tailored to attract corporates, businesses, and professional investors seeking sophisticated avenues for Bitcoin exposure.

Joey Garcia, Director at Xapo, articulated the fund’s strategic intent, stating, “Our objective is to offer well-structured products that not only provide exposure to Bitcoin’s price movements but also present avenues to enhance the Bitcoin value of investments. This represents a natural progression in the maturation of this asset class.”

While specific details regarding the fund’s fee structure remain undisclosed, the firms hinted that fees will be “below the standard 2% and 20% typically associated with hedge funds.” This traditional structure generally involves a 2% management fee alongside a 20% performance fee based on the fund’s profitability.

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The emergence and growth of Bitcoin-denominated hedge funds serve as a significant indicator of increasing institutional engagement with cryptocurrency. It underscores a rising demand for advanced financial instruments that cater to sophisticated investors, far beyond the scope of retail offerings.