Meanwhile Group has introduced a novel Bitcoin investment vehicle called the Meanwhile BTC Private Credit Fund LP through its subsidiary, Meanwhile Advisors, according to a Dec. 7 press release.
The startup is backed by notable investors, including Sam Altman and Gradient Ventures, and raised $20 million in its recent seed funding round.
Meanwhile is looking to raise $100 million and offers a 5% yield in Bitcoin. The fund’s strategy aims to increase investors’ Bitcoin holdings without requiring additional principal investment. Anchorage Digital will serve as custodian for the fund.
Meanwhile Group co-founder and CEO Zac Townsend said the fund aims to foster a robust Bitcoin economy by creating solid financial products that bridge fiat currencies and cryptocurrencies.
Bitcoin Private Credit Fund
Meanwhile Advisors aims to leverage its proficiency to lend Bitcoin to a meticulously selected group of institutional borrowers, ensuring a higher degree of safety and creditworthiness than the risks usually encountered in retail-centric lending platforms.
Investors will contribute U.S. dollars, which will be converted to Bitcoin and lent out to generate a 5% return in Bitcoin. Townsend said this will result in investors accumulating more Bitcoin as its value increases without investing more principal.
Townsend also highlighted the fund’s conservative lending approach to institutional borrowers, contrasting it with the strategies of failed crypto lenders like BlockFi and Celsius. He pointed out the closed-end structure of the fund as a safeguard against insolvency risks.
The fund has a minimum investment requirement of $250,000 and a total term of seven years — broken down into a three-year investment period and a four-year harvest period, during which returns are distributed to investors.
The fund has a unique fee structure with a 2% management fee and a 20% carried interest fee, both charged in Bitcoin. This approach aligns the fund’s success with appreciating Bitcoin rather than fiat currency.
ETF hype
The launch coincides with heightened anticipation for a U.S. spot Bitcoin ETF filed by giants like BlackRock and Fidelity Investments in recent months.
According to Townsend, such an ETF would complement the Meanwhile fund by increasing institutional interest in Bitcoin, thereby boosting its value and the attractiveness of the fund’s Bitcoin-denominated returns.
Townsend said:
“As the digital asset economy grows, institutional investors will look for innovative ways to activate their exposure to the asset class, and we believe Meanwhile is uniquely situated to deliver this strategy given its expertise within the insurance business.”
Industry insiders believe the SEC will approve the applications in the coming weeks as the regulator’s discussions with the applicants seem to have reached an advanced stage as of Dec. 7.