Bitwise to Launch Two Ethereum ETFs on October 2nd
In the dynamic world of cryptocurrencies, Bitwise Asset Management, one of the United States’ leading asset managers, is making significant strides. On October 2, 2023, Bitwise is set to launch not one but two Ethereum exchange-traded funds (ETFs) to cater to the growing appetite for crypto investments. This move responds to increased regulatory uncertainty and aims to provide investors with innovative opportunities in the crypto space.
Bitwise just filed Form 8-As for two new Ether futures ETFs that intend to begin trading on Monday, October 2. Read the full press release here: https://t.co/73FvSKgfwu
Bitwise’s decision to delve into Ethereum ETFs is a strategic one. Ethereum, the second-largest cryptocurrency by market capitalisation, offers a unique investment proposition. As Matt Hougan, Bitwise’s Chief Investment Officer, points out, Ethereum boasts a more extensive portfolio opportunity than Bitcoin. Some investors see Ethereum as an alternative, while others view it as a conventional growth investment, combining both attributes.
The Duo: Bitwise Ethereum Strategy ETF and Bitwise Bitcoin and Ether Equal Weight Strategy ETF
Bitwise is introducing two Ethereum futures ETFs:
Bitwise Ethereum Strategy ETF (AETH): This ETF will invest in regulated Chicago Mercantile Exchange (CME) Ethereum futures, focusing on front-month contracts.
Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP): BTOP will provide investors with equal exposure to regulated CME Bitcoin futures and CME Ether futures.
Both ETFs will be launched on October 2, 2023, offering investors diversified exposure to the crypto market through regulated futures contracts rather than physical crypto holdings.
Regulatory Navigations
Bitwise’s approach to Ethereum ETFs differs from traditional ETFs. Instead of pursuing approval from the U.S. Securities and Exchange Commission (SEC), Bitwise filed Form 8-As, a route that doesn’t require explicit authorisation by the regulatory body. This strategic choice enables Bitwise to navigate the evolving regulatory landscape while providing crypto-based investing options to users without direct access to physical cryptocurrencies.
Custody and Expenses
Bank of New York Mellon has been selected as the custody provider for both AETH and BTOP. The cumulative expense ratio for these ETFs stands at 0.85%, making them a cost-effective choice for investors seeking exposure to Ethereum and Bitcoin futures.
Evolving Crypto Landscape
Bitwise’s move into Ethereum ETFs aligns with its crypto-friendly approach. In July, the firm’s NYSE-traded Crypto Industry Innovators ETF (BITQ) successfully amassed over $100 million in assets under management (AUM). While Bitwise forges ahead with its Ethereum ETFs, it’s essential to note that the SEC has delayed decisions on various requests for Bitcoin and Ethereum spot-based ETFs, leaving these products uncertain in 2023.
The Broader Ethereum ETF Race
Bitwise isn’t alone in its Ethereum ETF pursuit. Other asset management giants, such as Invesco, are also exploring the possibilities of introducing Ethereum ETFs, intensifying the competition in this space. The regulatory landscape, including the outcome of the Grayscale lawsuit, plays a crucial role in determining when the SEC might approve spot Bitcoin ETF applications.
Conclusion
Bitwise’s foray into Ethereum ETFs signals the growing importance of Ethereum in the cryptocurrency market. These innovative ETFs offer investors a regulated avenue to gain cryptocurrency exposure without needing physical assets. As the crypto market evolves, Bitwise’s strategic approach to ETFs may set a precedent for the industry, catering to seasoned crypto enthusiasts and those looking to diversify their portfolios in this exciting digital frontier.
