Bitwise Asset Management, the investment firm that pioneered the first privately-offered cryptocurrency index fund, announced today that it will file the registration statement with the Securities and Exchange Commission (SEC) that will introduce the first publicly-offered cryptocurrency index exchange-traded fund (ETF) to the capital markets.
The focus of the Bitwise HOLD 10 Index Cryptocurrency Fund is to track the returns of Bitwise’s HOLD 10 Index–a market-cap-weighted index consisting of the 10 largest cryptocurrencies. The HOLD 10 Index captures approximately 80% of the total market capitalization of the cryptocurrency market based on liquidity, concentration and custody limitations.
“Our research shows that an index basket of multiple cryptocurrencies behaves differently than a single coin,” said Matt Hougan, Bitwise Global Head of Research. “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.”
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A registration statement relating to the shares of the HOLD 10 Index Cryptocurrency Fund has been filed with the SEC, but has not yet been declared effective. Furthermore, the shares may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. Additionally, an offering of the shares of the Bitwise HOLD 10 Index Cryptocurrency Fund will be made only by means of a prospectus.
Bitwise Asset Management’s filing with respect to offering a cryptocurrency-related ETF comes as other firms like VanEck and SolidX Partners Inc are trying to do the same. Obtaining approval from a government entity like the SEC will provide a veil of authenticity to help legitimize cryptocurrencies and gain more approval from investors.
“We are aware that other investment firms have filed for cryptocurrency ETFs under the Securities Act of 1933, and that there continues to be interest in filing under the Investment Company Act of 1940. As best we know, all of these funds plan to offer exposure to a single coin such as bitcoin or ethereum. That is fine, but our proposed offering is obviously different,” said Bitwise Global Head of Exchange-Traded Products John Hyland. “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. 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.”
Founded in 2017, Bitwise Asset Management is a cryptocurrency asset manager. Bitwise launched the first privately-offered cryptocurrency index fund, the HOLD 10 Private Index Fund, on November 22, 2017. The fund is a private placement vehicle that is open to accredited investors and offers weekly liquidity. It tracks the same index as the proposed ETF.
Bitwise is backed by leading institutional and individual investors, including Khosla Ventures, General Catalyst, Blockchain Capital, Naval Ravikant, David Sacks, Elad Gil, Adam Nash, Adam Ludwin, Suna Said, and Avichal Garg. The firm is a partner to individuals, financial advisors, family offices, investment managers, and institutions in navigating cryptocurrency. The team behind Bitwise has expertise in technology, security, and finance, and is headquartered in San Francisco.
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