Crypto Quill

Bitwise Asset Management has taken a significant step toward expanding its offerings in the cryptocurrency investment space. On November 27, 2024, the firm submitted a filing with the United States Securities and Exchange Commission (SEC) for an exchange-traded fund (ETF) based on its existing 10 Crypto Index Fund. The filing was made in collaboration with the New York Stock Exchange (NYSE) Arca, which also seeks to list the fund as an exchange-traded product (ETP).

Overview of the Bitwise 10 Crypto Index Fund ETF

Launched in November 2017, Bitwise’s 10 Crypto Index Fund is an index that tracks the performance of the top 10 cryptocurrencies by market capitalization, with Bitcoin (BTC) and Ether (ETH) making up the majority of the fund. The proposed Bitwise 10 Crypto Index Fund ETF will provide investors with indirect exposure to these cryptocurrencies. It will be custodied by a third-party partner, ensuring the safekeeping of the fund’s portfolio assets.

As of now, the fund’s holdings are heavily weighted toward Bitcoin (75.14%) and Ether (16.42%), with additional assets in Solana (SOL), Ripple’s XRP, Avalanche (AVAX), Chainlink (LINK), Cardano (ADA), Bitcoin Cash (BCH), Uniswap (UNI), and Polkadot (DOT).

Custodianship and Fund Management

For this ETF, Coinbase Custody has been listed as the custodian for the cryptocurrency holdings, while The Bank of New York Mellon will handle the cash holdings, and manage the Trust’s administration and transfer agent duties. The Bitwise 10 Crypto Index Fund currently holds $1.4 billion in assets under management (AUM), solidifying its position as a significant player in the crypto investment space.

Bitwise’s Expanding Presence in Crypto ETFs

Bitwise is a prominent name in the digital asset management space, managing over $11 billion in AUM. This latest ETF filing is part of a broader strategic push to expand the firm’s ETF offerings. The company has recently made waves with several initiatives:

• Rebranding of the Bitwise XRP ETP: On November 27, Bitwise rebranded its European XRP ETF, initially launched in 2022, as the Bitwise Physical XRP ETP. This product is designed to provide European investors with direct exposure to XRP.
• Spot Bitcoin and Ether ETFs: Just days before, Bitwise filed for an ETF offering direct exposure to spot Bitcoin and Ether. This was part of its broader initiative to meet growing demand for crypto ETFs.
• Spot Solana ETF: On November 20, Bitwise also registered a trust for a Solana ETF, continuing its efforts to expand into new cryptocurrency assets.

Market Implications

Bitwise’s filing for the 10 Crypto Index Fund ETF represents a significant step in the maturation of the cryptocurrency investment market. The ETF would offer investors a diversified way to gain exposure to the top 10 cryptocurrencies, minimizing the risks associated with individual coin investments. It also represents a broader shift in institutional interest in cryptocurrencies, which has gained momentum amid evolving regulatory frameworks, particularly in the U.S.

As the SEC has yet to set a timeline for the approval or rejection of this ETF application, it remains to be seen whether this proposal will further bolster Bitwise’s position as a leader in the growing market for crypto-related financial products.

Looking Ahead

With crypto adoption continuing to rise, both retail and institutional investors are seeking ways to invest in this new asset class. The approval of Bitwise’s proposed ETF could pave the way for other crypto-focused funds, ultimately enhancing the accessibility and legitimacy of digital assets in traditional financial markets.