Bitwise Files Crypto Index ETF Proposal with US SEC

The race for the first US crypto ETF continues, with another contender joining. Bitwise Asset Management wants to list a fund, which offers exposure to several digital coins, instead of only Bitcoin.

Bitwise Asset Management, a cryptocurrency asset management firm founded in 2017, said on Tuesday its has applied with the US Securities and Exchange Commission (SEC) to list an exchange-traded fund (ETF). This comes at a time when several other companies are aiming to be the first to offer a Bitcoin ETF, targeting institutional money.

Presently, Bitwise manages the so called HOLD 10 Private Index Fund, which is only opened to accredited investors, with a minimum contribution of $25,000. Presuming Bitwise gets regulatory approval (which isn’t that certain, given the struggles others have experienced), it will catch the attention of both retail and institutional investors.

First and foremost, the minimum investment requirement will go down, which may attract those who want exposure to the digital asset class, but don’t want to bother with crypto exchanges and wallets. On the other hand, some companies, like pension funds and insurers, which aren’t legally allowed to own Bitcoin directly, may have a chance to trade this ETF.

A (somewhat) diversified portfolio of coins

The key difference between Bitwise’s proposal and most of the rest ETF applications is that the draft Bitwise HOLD 10 Cryptocurrency Index Fund will offer a portfolio of 10 cryptocurrencies while the others bet on Bitcoin only. When taking a look at Bitwise’s current exposure, one can see that Bitcoin is still the predominant asset, with a 55% share as of end-June. Here is a preview of all the coins in the HOLD 10 Index and their weight:

*Taken from the current fact-sheet, provided by Bitwise Asset Management

John Hyland, Global Head of Exchange-Traded Products at Bitwise, reiterated the distinction:

"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 ether. That is fine, but our proposed offering is obviously different."

A swift decision isn’t likely

The SEC will probably take its time when it comes to Bitwise. Those of you following the ETF race will note even more established financial services providers haven’t gotten a clear decision yet. For instance, the Chicago Board Options Exchange (CBOE) is awaiting August 10, when the final verdict will supposedly come. On the other hand, Direxion Asset Management’s proposal will be reviewed by September.