Bitwise Asset Management filed a registration statement with the Securities and Exchange Commission for a cryptocurrency exchange traded fund that it thinks has a chance at approval.
Others have filed for ETFs based on singular cryptocurrencies in the past but the new ETF is based on the asset manager’s Bitwise HOLD 10 Index Fund, a market-cap-weighted index of the 10 largest cryptocurrencies that captures approximately 80 percent of the total market capitalization. The HOLD 10 Private Index Fund is a private placement vehicle open to accredited investors with weekly liquidity.
The SEC had not declared the registration effective as of Tuesday afternoon and John Hyland, the manager’s global head of exchange-traded products, expects there to be dialogue between the investment firm and the regulator.
Matt Hougan, a well-known face in the exchange-traded fund industry and former CEO of Inside ETFs before leaving to become Bitwise’s global head of research, said a basket of cryptocurrencies has shown to behave differently than any single coin.
“Our view is that this new area has many similarities to the introduction 10 to 15 years ago of commodity ETFs,” Hougan said. “At that time, we saw the launch of single-commodity ETFs tracking gold, silver, crude oil and other commodities, as well as ETFs tracking diversified commodity index baskets. We see a lot of similarities here.”
Bitcoin, the cryptocurrency with the largest market capitalization at more than $141 billion, rocketed to $19,843 per coin at the start of 2018 before sharply falling. It remained below $7,000 for most of June and July but crept up to $8,205 in the past week—something at least one observer said could be the market pricing in the approval of a cryptocurrency ETF this year.