On Wednesday, Bitwise Asset Management, one of the largest and fastest-growing crypto-specialist asset managers, with AUM over $1.5 billion, announced the launch of the Bitwise Crypto Industry Innovators ETF (NYSE: BITQ). BITQ aims to provide investors with exposure to valuable public companies in the growing Bitcoin and cryptocurrency sectors.
The new ETF offers a way for investors to gain exposure to the crypto market without the challenges of directly holding crypto assets like Bitcoin and Ethereum.
BITQ seeks to track the Bitwise Crypto Industry Innovators 30 Index, designed with Bitwise’s industry expertise to capture “pure-play” companies engaged in actual, material activity in the crypto sector. Additionally, the index includes companies with at least $100 million of liquid crypto assets on their balance sheet.
In most cases, companies in the new index must derive at least 75% of their revenue from directly servicing cryptocurrency markets or have at least 75% of their net assets accounted for by direct holdings of liquid crypto assets. Such companies may, for example, offer crypto brokerage services, financial and banking services, mining solutions, technology solutions, or analytics solutions. The index rebalances quarterly.
“Like e-commerce and mobile before it, crypto is a disruptive technology creating massive opportunities for new companies to emerge as winners,” said Matt Hougan, CIO of Bitwise. “Until recently, most great crypto innovators were private companies, but that’s changing rapidly. Today, there’s a growing set of public companies capitalizing on crypto and more to come. BITQ aims to identify these businesses and give investors access.”
Unique Crypto Characteristics
The index is designed specifically to capture the unique characteristics of the crypto equity market. For example, the index has a “fast-entry” rule that allows new IPOs and direct listings to enter the index one day after their debuts, allowing the index to adapt to the rapidly changing market. As an example of this rule’s impact, on April 14, 2021, one of the largest names in cryptocurrency, Coinbase, went public. On April 15, 2021, Coinbase qualified for inclusion in the index that BITQ tracks at a 10% weight.
“Over the past few years, many investors have had to watch from the sidelines as a select few have reaped the rewards of stellar cryptocurrency returns,” said Hunter Horsley, CEO of Bitwise. “We’ve heard time and again from clients that the primary challenge has been finding a way to access the incredibly complex and fast-moving crypto space. With BITQ, we aim to make crypto investment opportunities available through traditional investing platforms and a familiar, liquid, and cost-effective ETF. We are thrilled to see this space continue to grow as investors increasingly gravitate toward this transformative asset class.”
ETF Trends CIO and Director of Research Dave Nadig also chimed in, stating, “With the SEC still firmly on the fence about direct cryptocurrency ETFs, the space for “near-miss” ETFs is getting more competitive. Whether you’re a crypto believer or not, there is an ecosystem developing, and BITQ offers a unique, pure play way to access the space — with the associated risks and costs of any narrow, high profile thematic investment.”
Bitwise manages a growing suite of investment funds, including one of the largest crypto index funds, the first “DeFi” crypto index fund, and several other strategies. The firm focuses on partnering with investment professionals and today serves RIAs, multifamily offices, financial advisors, and other institutional managers.
The BITQ fund tracks the Bitwise Crypto Industry Innovators 30 Index. Developed by Bitwise with input from Moorgate Benchmarks’ index research team, the index is calculated and distributed by Moorgate Benchmarks, a rapidly growing index calculation and benchmark administration company based in London, England, with deep expertise in the index space. Exchange Traded Concepts, an ETF platform provider, serves as the investment adviser to the BITQ fund, and SEI Investment Distribution Co., a provider of investment management services, is the distributor of BITQ.
For more information, visit www.BITQETF.com.
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