Crypto asset management firm Bitwise announced the launch of the ‘Bitwise Crypto Industry Innovators ETF’, the first listed ETF in the US with ‘crypto’ in it’s name. Bitwise has over $1.5B in assets under management.
The Bitwise ETF
The Bitwise ETF will be listed on the New York Stock Exchange under the ticker BITQ. The company has designed a ‘Bitwise Crypto Industry Innovators 30 Index’ for the ETF to track, focused on thirty companies with material activity in the crypto sector with at least $100M of liquid crypto assets on the balance sheet. Additionally, companies in the index must derive a minimum of 75% of their revenue from “directly servicing cryptocurrency markets” or have a minimum of 75% of their net assets allocated towards direct holdings of liquid crypto assets.
Matt Hougan, CIO of Bitwise, noted in the press release that there are a “growing set of public companies capitalizing on crypto” and that the ETF intends to “identify these businesses and give investors access”.
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Crypto ETFs
ETFs are continuing to be a sticking point in the crypto conversation. For example, Canadian asset management firm Purpose Investments unveiled an Ethereum ETF on the Toronto Stock Exchange last month. Other companies, such as Fidelity, Grayscale, and Kryptoin have been working on their own respective ETFs as well.
Given the rapid pace that companies are evolving, the BITQ ETF in particular will have a ‘fast-entry’ rule implemented. This rule will allow the ETF to allocate a position of a company just a day after the company goes public; for example, when Coinbase went public last month, the BITQ ETF was able to allocate a 10% index weight of the firm just a day later. The fund will be comprised of crypto-based stocks, and not specific crypto coins.
Bitwise continues to grow it’s portfolio of crypto investment offerings, which also includes the first ‘DeFi’ crypto fund.
Coinbase ($COIN) will be BITQ's largest holding for the ETF's debut. | Source: $COIN on TradingView.com
The Meat On The Bone
According to reports, the listing is expected to launch as early as this week. So what’s the fund comprised of? The net assets of the fund currently total roughly $1.2M. Outside of the aforementioned Coinbase, allocated at over 10% of the fund, other top holdings include Microstrategy, Galaxy Digital, Riot Blockchain, and Voyager Digital.
While small-cap firms are of course present, major companies such as PayPal, Square, and AMD are also included. Bitwise delegates holdings as falling within one of two buckets. The first, Tier 1 Companies, are described as “crypto innovators”, and likely carry more volatility. The second are Tier 2 Companies, which must have over a $10B market cap and business initiatives in crypto.
You can view a full list of the firm’s holdings here.
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