Bitwise Asset Management has filed a proposal with the U.S. Securities and Exchange Commission (SEC) for a joint Bitcoin-Ethereum exchange-traded fund (ETF).
If approved, the ETF will give investors exposure to the two largest cryptocurrencies without requiring them to hold the assets directly. The plan is to list the ETF on NYSE Arca, though the ticker symbol remains undisclosed.
The fund won’t dabble in active management or derivatives. It’s as simple as it gets—hold Bitcoin, hold Ethereum, track their combined value, and call it a day.
For pricing accuracy, the Trust uses benchmarks developed by CF Benchmarks Ltd. These benchmarks aggregate trade data from platforms like Coinbase, Kraken, and Gemini, ensuring that the fund’s value reflects the real-world trading environment. The Trust’s net asset value (NAV) is calculated daily using these pricing benchmarks.
Shares in the ETF will be issued or redeemed in blocks of 10,000 units, referred to as “Baskets.” Each Basket contains specific amounts of Bitcoin and Ethereum, adjusted regularly to account for fees and market movements.
Bitwise has also set an annual Sponsor Fee, which is deducted as a percentage of the fund’s total holdings. The exact fee hasn’t been disclosed yet, but it’s expected to align with industry standards for crypto ETFs.
The Bank of New York Mellon (BNY Mellon) steps in as the ETF’s administrator, providing tax, accounting, and financial reporting services. It also acts as the fund’s cash custodian, ensuring a seamless flow of money in and out of the Trust. Foreside Fund Services handles the marketing, making sure all promotional materials comply with SEC and FINRA regulations.
If approved by regulators, the Trust may eventually allow in-kind creation and redemption of shares using Bitcoin and Ethereum directly. For now, however, all transactions will be settled in cash.
Bitwise Investment Manager, a subsidiary of Bitwise, is providing the initial capital to kickstart the ETF. This seed capital will be used to buy Bitcoin and Ethereum ahead of the ETF’s launch. Once trading begins, shares will be available to the public through traditional brokerage accounts.
The Trust is passively managed, which means no active trading strategies, no leveraging, and no staking of Ethereum. It’s purely a buy-and-hold setup. The goal is to track the value of Bitcoin and Ethereum as closely as possible, without trying to outsmart the market.
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