Bitwise, a prominent cryptocurrency index fund, has filed with the U.S. Securities and Exchange Commission (SEC) to offer a cryptocurrency-based exchange-traded fund (ETF).
In a press release issued on July 24th, the company stated that they intend to create an ETF called “Bitwise HOLD 10 Cryptocurrency Index Fund” which would be tied to the ten largest cryptocurrencies by market capitalization. The index is going to capture about 80% of the total market capitalization of the cryptocurrency market.
Bitwise said that they would use a 5-year-diluted market cap and take several parameters into consideration for eligibility keeping continuously changing supply, liquidity, trade volume concentration, and custody limitations in mind.
The proposal is not in effect yet and would have to be approved by the SEC to be available for trading on traditional stock markets.
Bitwise has launched the private HOLD 10 index fund back in November 2017. The fund is open for accredited investors and offers weekly liquidity. The proposed publicly-offered ETF would track the same index as the private fund.
As CCN reported earlier, Cryptocurrency-backed ETFs have gained significant momentum in the last one year. CBOE, world’s largest futures exchange, has filed with the SEC to enable public markets to trade bitcoin ETF.
Previously, financial institutions SolidX and Gemini, US cryptocurrency exchange founded by the Winklevoss twins, have filed with the SEC for similar crypto ETF’s in 2017. However, the SEC rejected both the proposals citing lack of overseas regulations and price manipulation in cryptocurrency markets. VanEck and SolidX partnered to issue non-futures bitcoin shares for trading. In response, the SEC has issued a formal call for public comments to list the ETF on public exchanges. Individuals can send the SEC comments on the proposal through the agency’s internet comment form or by emailing firstname.lastname@example.org with filing number SR-CboeBZX-2018-040 on the subject line.
The SEC hasn’t approved a single crypto ETF till date, but given the rising efforts an interest, a bitcoin-based ETF is a definite possibility. A crypto ETF will definitely widen the exposure of crypto markets to both institutional investors and the general public.
Featured image from Shutterstock.
Last modified: May 20, 2020 6:22 PM UTC