Bitwise Files For First Cryptocurrency Index ETF
Looks forward to discussing its alternative approach with regulators
Bitwise Asset Management, creator of the world's first privately-offered cryptocurrency index fund, the Bitwise HOLD 10 Private Index Fund, today announced the filing of the registration statement for a new fund, the first publicly-offered cryptocurrency index exchange-traded fund (ETF).
The new ETF will be called the Bitwise HOLD 10 Cryptocurrency Index Fund. It aims to track the returns of Bitwise's HOLD 10 Index, a market-cap-weighted index of the 10 largest cryptocurrencies, rebalanced monthly. The HOLD 10 Index captures approximately 80% of the total market capitalization of the cryptocurrency market. It uses a 5-year-diluted market cap and other eligibility criteria meant to address challenges of the crypto space such as continuously changing supply, liquidity, trade volume concentration, and custody limitations.
A registration statement relating to the shares of the Bitwise HOLD 10 Cryptocurrency Index Fund ETF has been filed with the Securities and Exchange Commission (SEC) but has not yet been declared effective. The shares of the ETF may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release is not an offer to sell or the solicitation of an offer to buy shares of the fund, nor will there be any sale of the shares in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. An offering of the shares of the Bitwise HOLD 10 Cryptocurrency Index Fund ETF will be made only by means of a prospectus.
About Bitwise Asset Management and the HOLD 10 Index
Founded in 2017, Bitwise Asset Management is a cryptocurrency asset manager. Bitwise launched the first cryptocurrency index fund, the Bitwise HOLD 10 Private Index Fund, on November 22, 2017. The fund is an open-ended private placement vehicle that is open to accredited investors and offers weekly liquidity. It tracks the same index as the proposed publicly-offered ETF.
Bitwise representatives provided the following information regarding the application of their HOLD 10 Index methodology to a publicly-offered index-based ETF:
"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," 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."
Bitwise's Global Head of Research Matt Hougan further added: "Our research shows that an index-tracking basket of multiple cryptocurrencies behaves differently than a single coin. 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 is backed by leading institutional and individual investors, including Khosla Ventures, General Catalyst, Blockchain Capital, Naval Ravikant, Alison Davis, 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, which includes several veterans of the ETF industry, has expertise in technology, security, indexing, and asset management , and is headquartered in San Francisco.