- Bitwise has filed the Bitwise 10 Crypto Index ETF with the US SEC, hoping for approval amid the changing regulatory outlook.
- The ETF will track the prices of 10 cryptocurrencies including Bitcoin, Ethereum, Solana, XRP, Cardano, Avalanche, Chainlink, Bitcoin Cash, Polkadot, and Uniswap, with different weighted proportions.
- Coinbase Custody will be the custodian for the crypto component of the fund, while Bank of New York Mellon will serve as the custodian for cash holdings, administrator, and transfer agent.
Bitwise has been aggressively pursuing crypto ETF products amid growing optimism of SEC approval. The forthcoming resignation of crypto-skeptic SEC Chair Gary Gensler has boosted hopes that diversified crypto ETFs may soon get a green light. With this latest filing, Bitwise aims to position itself at the front of the pack.
The Components of the Bitwise 10 Crypto Index ETF
The Bitwise fund will track a market cap-weighted index of the top 10 cryptocurrencies. The components and weightings are:
- Bitcoin (75.14%)
- Ethereum (16.42%)
- Solana (4.3%)
- XRP (1.56%)
- Cardano (0.66%)
- Avalanche (0.55%)
- Chainlink (0.39%)
- Bitcoin Cash (0.38%)
- Uniswap (0.31%)
- Polkadot (0.3%)
The index methodology gives Bitcoin the lion’s share, while still providing exposure to leading altcoins.
Custody and Administration
To securely custody the crypto assets, Bitwise has partnered with Coinbase Custody. Bank of New York Mellon will handle cash holdings, serve as fund administrator, and act as the transfer agent.
Pricing and Net Asset Value
The fund will use CF Benchmarks’ pricing data to calculate its net asset value (NAV) at the end of each trading day. This will allow the ETF to closely track the underlying index.
The Road Ahead
The countdown is now on for the SEC to provide feedback within 45 days of the filing. It remains to be seen whether Bitwise’s latest crypto ETF will meet the same fate as its previous filings, which were rejected by the SEC. However, the changing regulatory environment boosts the chances that 2023 could finally be the year of the crypto ETF.
Conclusion
With its 10 Crypto Index ETF, Bitwise aims to give investors easy and secure exposure to the crypto market’s blue chips. By tracking an index, the proposed ETF would provide diversified exposure without investors needing to pick individual coins. Now the firm must convince the SEC that both investors and the market are ready for this mainstream crypto product.
