Crypto Investment Firm Bitwise Files With SEC For Cryptocurrency Index ETFbr>
Crypto investment startup Bitwise Asset Management has filed with the US Securities and Exchange Commission (SEC) to offer an exchange-traded fund (ETF) tied to the top 10 cryptocurrencies.
Bitwise Asset Management is a cryptocurrency asset manager that develops funds, indexes, insight, and other services. Led by Hunter Horsle, the team behind Bitwise, which includes several veterans of the ETF industry, has expertise in technology, security, indexing, and asset management.
First unveiled in October 2017, the Bitwise HOLD 10 Cryptocurrency Index Fund will track the returns of the firm’s HOLD 10 Index, a market-cap-weighted index of the 10 largest cryptocurrencies. The fund rebalances monthly, capitalizes on hard forks and airdrops, and will be a low-cost way to gain exposure to the emerging crypto asset class. The fund aims to address challenges of the crypto space such as continuously changing supply, liquidity, trade volume concentration, and custody limitations.
“Our research shows that an index-tracking basket of multiple cryptocurrencies behaves differently than a single coin,” said Bitwise’s Global Head of Research Matt Hougan. “As such, we think both sorts of exposure need to be looked at by investors when considering the growing cryptocurrency space. Our view is that this new area has many similarities to the introduction 10 to 15 years ago of commodity ETFs. At that time, we saw the launch of single-commodity ETFs tracking gold, silver, crude oil, and other commodities, as well as ETFs tracking diversified commodity index baskets. We see a lot of similarities here.”
Bitwise said a registration statement relating to the shares of the ETF has been filed with the SEC but has not yet been declared effective. Until the SEC decides on whether to approve the ETF, related shares may not be sold, and offers to purchase the shares cannot be accepted by any of the company’s executives.
“We know that the current crypto ETF filings have generated a great deal of discussion and analysis within the SEC about this emerging asset class, and the SEC and its staff, to their credit, have asked for public comment on a wide range of issues relating to these products,” said Bitwise Global Head of Exchange-Traded Products John Hyland. “We expect the staff of the SEC has had ongoing discussions with the investment firms making the crypto filings to date, and we look forward to having our own discussions with the SEC about the nature of our proposed offering.”
While other companies have filed for bitcoin-only ETFs, Bitwise is the first firm to apply for an ETF that would track multiple cryptocurrencies. The SEC, however, has yet to approve a crypto-based ETF. Last year, the agency rejected an application for a bitcoin-based investment vehicle by Cameron and Tyler Winklevoss, founders of the Gemini exchange. The SEC also recently postponed its review on five other ETFs proposed by Direxion Investments.