Bitwise Officially Files For Bitcoin And Ethereum ETF

Bitwise Asset Management has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) for a Bitcoin-Ethereum exchange-traded fund (ETF). If approved, the ETF will allow investors to gain exposure to Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies, without needing to directly hold them.

The plan is for the ETF to be listed on NYSE Arca, although its ticker symbol has not yet been revealed. Previously, Bitwise made a notable update by revising its S-1 form and setting a fee of 0.20% for its Ethereum Spot ETF application. The move came shortly after the U.S. SEC approved Ethereum Spot ETF applications for both ProShares and Grayscale Investments.

Calculating The NAV

The fund will follow a straightforward strategy, simply holding Bitcoin and Ethereum and tracking their combined value, without engaging in active management or derivatives. To ensure accurate pricing, the Trust will rely on benchmarks developed by CF Benchmarks Ltd., which aggregate trading data from platforms like Coinbase, Kraken, and Gemini.

This will significantly help the overall value of the fund reflect the actual market conditions. The net asset value (NAV) of the Trust will therefore be calculated daily based on these benchmarks. Also, shares in the ETF will be issued or redeemed in blocks of 10,000 units, known as Baskets, which will contain specific amounts of Bitcoin and Ethereum, adjusted regularly to account for fees and market fluctuations.

Key Details

The Bank of New York Mellon (BNY Mellon) will serve as the administrator for the ETF, handling tax, accounting, and financial reporting, as well as acting as the cash custodian for the Trust. Foreside Fund Services will manage the marketing and ensure all promotional materials comply with SEC and FINRA regulations.

If the proposal is approved, the Trust might eventually allow shares to be created and redeemed in-kind with Bitcoin and Ethereum directly. For now, all transactions will be settled in cash. Bitwise Investment Manager, a subsidiary of Bitwise, will provide the initial capital to launch the ETF, purchasing Bitcoin and Ethereum ahead of its debut. Once the fund starts trading, shares will be accessible through traditional brokerage accounts.