Bitwise Asset Management aims to enhance cryptocurrency investment options by submitting a proposal to the U.S. Securities and Exchange Commission (SEC) for an innovative exchange-traded fund (ETF). This proposed ETF, based on its existing 10 Crypto Index Fund, would incorporate ten major cryptocurrencies, offering investors indirect exposure to these digital assets.
The ETF is designed to mirror the prices of its constituent cryptocurrencies in weighted proportions, allocating investments accordingly. The principal assets include Bitcoin, Ethereum, and Solana, which collectively form the bulk of the index. Bitcoin dominates with a 75.1% allocation, followed by Ethereum at 16.5% and Solana at 4.3%. The remaining seven cryptocurrencies—XRP, Cardano, Avalanche, Chainlink, Bitcoin Cash, Polkadot, and Uniswap—are allocated various smaller percentages, all contributing to a diversified portfolio.
Outlined in the November 27 filing, the ETF's assets will be restricted to the portfolio assets and cash, explicitly excluding ownership of any additional cryptocurrencies. The Net Asset Value (NAV) will be calculated using data from CF Benchmarks, ensuring a thorough and accurate valuation compiled from multiple trading platforms.
Security and oversight will be managed by Coinbase Custody for the crypto assets, while the Bank of New York Mellon will maintain cash reserves, serve as the administrator, and manage transfer activities. Although the SEC has acknowledged the application, a timeline for the decision remains unspecified.
Bitwise's ETF proposal marks another step in its strategic expansion within the cryptocurrency market. Earlier in November, the firm achieved a milestone, surpassing $10 billion in assets under management (AUM), with an impressive $1 billion growth in just ten days.
Moreover, Bitwise is broadening its ETF offerings. It recently announced NYSE Arca's filing to list a combined Bitcoin and Ethereum ETP, structured by market capitalization. Simultaneously, Bitwise ambitiously rebranded its European XRP ETF to Bitwise Physical XRP ETP, supported by Ripple’s investment commitment.
Venturing further, the company took significant actions in the burgeoning Solana ETF space by registering a statutory trust in Delaware on November 20, complementing its previous XRP ETF filing in the state.
The election of Donald Trump as U.S. president, coupled with the impending resignation of SEC Chair Gary Gensler, has stirred optimism in the crypto realm. Industry players are leveraging this sentiment to advance their crypto ETF agendas. Despite this promising environment, hurdles remain. Bloomberg analyst James Seyffart cautioned that substantial regulatory challenges could hamper the timeline for altcoin ETF approvals.