Asset Manager Stone Ridge Files SEC Prospectus for Cash-Settled Bitcoin Futures Fund

Another bitcoin futures product is brewing, as indicated by a Stone Ridge Asset Management filing with the U.S. Securities and Exchange Commission. 

The firm filed a prospectus for a cash-settled bitcoin futures fund—named the NYDIG Bitcoin Strategy Fund—with the controller on October 2.

Based in New York City, Stone Ridge has around $15 billion in assets under management, serving residents in both the United States and China. Established in 2012, the company provides portfolio management and advisory services.

One hundred thousand futures shares will be sold at $10 each, and have no minimum buys. They will be constrained to eligible investors as indicated by Stone Ridge, the filing notes.

The fund won’t put resources into bitcoin or other cryptocurrencies directly but utilizes bitcoin as the underlying reference asset. To support the fund, Stone Ridge will buy bitcoin futures to match the fund’s aggregate value one-to-one alongside a lot of cash, business securities, and government securities to maintain liquidity, offer collateral, along with leverage.

The prospectus warns while describing bitcoin a speculative asset:

“Bitcoin was developed within the last decade and, as a result, there is little data on its long-term investment potential.”

As a prospectus, the details underscored by Stone Ridge are subject to change.

Bitcoin-based financial products keep on hitting the market, with physically-settled bitcoin futures platform Bakkt launched a week ago. While settling more than $5 million in its first week, the launch flagged the end of a regulatory hurdle for over a year.