In summary
- The NYSE Arca received a proposal to list the Bitwise crypto ETF, valued at $1.4 billion, with Bitcoin leading 75% of the portfolio.
- Bitwise included cryptoassets based on volume, security and custody, proposing Coinbase Custody and Bank of New York Mellon for support.
- The fund’s strategy, supported by Rule 8.800-E, seeks to facilitate access to the crypto market through traditional brokerage accounts.
Something interesting just landed on the desk of the US Securities and Exchange Commission (SEC): The NYSE Arca, considered Wall Street’s electronic home for exchange-traded funds (ETFs), wants to list the Bitwise crypto index fund valued at $1.4 billion.
The numbers in the document seem to show where you think the smart money is headed. Unveiled on Wednesday, the proposed ETF reveals a carefully weighted portfolio that is far from encompassing many cryptos.
Bitcoin continues to command the majority with 75.14%, while Ethereum represents 16.42%. Together, these two account for more than 91% of the fund’s holdings.
The remaining portion is split between what Bitwise considers mid-cap tokens: Solana (4.30%), XRP (1.50%), and Cardano (0.70%).
What’s left of the pie is distributed among prominent projects that the crypto investment firm considers small-cap tokens: Avalanche (AVAX) with 0.60%, Chainlink (LINK) and Bitcoin Cash (BCH) with 0.40%, and Polkadot (DOT) along with Uniswap (UNI) with 0.30%.
Evaluating the Fund
The fund is not simply looking for trendy tokens. Each asset included must overcome serious hurdles: stable trading volume, adequate custody solutions, and zero known security issues.
Perhaps most importantly, the assets need to maintain a price above $0.01 for at least 30 consecutive days, a rule that eliminates the equivalent of penny stocks in the crypto world.
Bitwise is not taking risks with custody. It proposes Coinbase Custody for digital assets and Bank of New York Mellon to handle cash and administrative tasks.
Moving chips
Looking at the data, there are some interesting patterns that suggest broader moves in the ETF space.
First, the NYSE Arca filing includes a crucial 90% surveillance swap agreement requirement. This same framework helped Bitcoin ETFs and Ethereum ETFs take off earlier this year.
Just last week, Bitwise introduced a Solana ETF as SOL approached a new all-time high. Notably, Bitwise has combined three Bitcoin and Ethereum futures ETFs into a single momentum-based strategy, a move made when “Uptober” was starting.
The fund has been around since November 2017, making it one of the oldest crypto index products. Now it wants to move up to NYSE Arca, and under new frameworks like Rule 8.800-E, specifically designed for digital assets, it could have a chance.
If approved, it would allow investors to get a piece of the broader crypto market through their regular brokerage accounts.
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