Bitwise Asset Management, a crypto startup that pioneered the world’s first cryptocurrency index fund is now gunning to launch the world’s first Bitcoin exchange-traded fund (ETF).
The innovative crypto company has already filed an initial registration form with the US Securities and Exchange Commission (SEC) to propose a Bitwise Bitcoin ETF Trust. Bitwise’s proposed ETF would purportedly address the regulatory concerns that have thus far doomed other Bitcoin ETFs from launching.
Bitwise’s Unique Bitcoin ETF Proposition
According to the initial registration statement, the ETF would track the Bitwise Bitcoin Total Return Index, which takes the value of Bitcoin and any meaningful hard forks into account.
Moreover, what’s unique about Bitwise’s Bitcoin ETF is the company wants their fund to be supported with spot prices from exchanges and physically settled futures contracts. This is different from any other Bitcoin ETF that was proposed before, as previous ETFs were supported with cash-settled contracts.
For this reason, among others, Bitwise’s global head of Exchange-Traded Funds John Hyland remains hopeful that the SEC will approve their Bitcoin ETF but also remains realistic by stating:
“While there can be no assurance that the 19b-4 application will be granted or the SEC will review and ultimately accelerate the registration statement, we are optimistic that 2019 should be the year that a bitcoin ETF launches.”
Also, Hyland believes that the crypto trading ecosystem has evolved significantly over the past year, and he stated:
“Having a regulated bank or trust company hold physical assets of a fund has been the standard under U.S. fund regulation for the last 80 years, and we believe that is now possible with bitcoin.”
Bitwise Asset Management Background
The Bitwise Bitcoin ETF has generated quite a lot of hype with its newfound ETF proposition that gets its valuation from physically settled Bitcoin futures contracts, something that has never been proposed before. But does this crypto startup deserve the hype? What’s their background and reputation?
Bitwise was only recently founded in 2017 and is based out of San Francisco. The firm’s team is made up of professionals with decades of asset management experience.
Some of the firm’s members come from backgrounds such as Facebook, Wealthfront, BlackRock, NYLife Investments, IndexIQ, US Commodity Funds, Goldman Sachs, JPMorgan, and ETF.com.
As well, the firm is backed by experienced investors, executives, and companies including PayPal, BlackRock, Square, Coinbase, Stripe, Western Asset, Royal Bank of Scotland, Chain, Twitter, Palantir, and McKinsey.
According to the Bitwise website:
“Bitwise Asset Management pioneered the first cryptocurrency index fund and is the leading provider of rules-based exposure to the crypto asset space.”
In total, the digital asset management firm features 4 best-in-class crypto indexes: Bitwise 10 Large Cap, Bitwise 20 Mid Cap, Bitwise 70 Small Cap, and Bitwise 100 Total Market. Each index is meticulously designed to follow a clear-set rule base that takes various factors into account.
All in all, while Bitwise is a new crypto startup, they appear to be doing very well for themselves and are well on their way to becoming a big name in the cryptocurrency space, especially if their new Bitcoin ETF gets approved.
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