Bitwise Asset Management, a San Francisco-based start-up, announced that it has filed a registration statement with the Securities and Exchange Commission (SEC) for approval to offer publicly traded cryptocurrency index exchange-traded fund (ETF).
The company affirms in their statement that what they plan to offer is a new ETF that will track the returns of the 10 largest cryptocurrencies. This would make it the first application of its kind, seeking to expose investors to more than just Bitcoin (BTC).
According to the company’s CEO and co-founder, Hunter Horsley, the HOLD 10 Index is an invaluable asset for investors. The main attraction is that unlike other funds, this one isn’t tied to the performance of one coin. He emphasized that the HOLD 10 Index offered investors broad crypto exposure.
As such the fund looks to capitalize on dynamics like hard forks and airdrops, essentially giving investors a low-cost avenue to gain much-needed exposure to a rapidly expanding crypto space.
Bitwise has indicated that the index will seek to gain exposure to 80 percent of the total crypto market. It will use a five-year diluted market cap among other eligibility criteria to hedge against the challenges that accompany crypto investments.
The HOLD 10 Index comprises of bitcoin (BTC), Ethereum (ETH), XRP, bitcoin cash (BCH), lumens, LTC, DASH, Zcash, Monero, and Ethereum Classic (ETC) at the moment.
Bitwise was founded in 2017 and has the backing of a good number of institutional and individual investors. Some of the prominent ones include institutional investors like:
Khosla Ventures;
Blockchain Capital; and
General Catalyst.
There are also individual investors that include:
Naval Ravikant;
David Sacks;
Alison Davis;
Adam Nash;
Elad Gil;
Suna Said;
Adam Ludwin; and
Avichal Garg
The U.S. regulators have yet to approve a single cryptocurrency-based ETF. The SEC’s reluctance to give a nod to bitcoin ETFs have mostly been pegged on security and price manipulation concerns.
That concern has seen the regulator take a tough stance against cryptocurrency-related fraud cases, including suspending some stock trading and halting Initial Coin Offerings (ICOs).
On July 24, the watchdog postponed a decision on an application by Direxion, an ETF issuer. Earlier, it had rejected an application by the Winklevoss brothers, founders of Gemini crypto exchange.
The SEC also asked the public to submit comments on another application by CBOE that seeks to offer a bitcoin ETF. The market is very optimistic about the CBOE ETF listing application, which is managed by VanEck and SolidX and could be approved as early as next month.
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