The ETF won’t be holding Bitcoin or Ethereum directly but tracks the performance of public companies that are involved in the cryptocurrency sector.
Bitwise, a digital asset manager with $1.5 billion in assets under management as of May 7, 2021, is launching the Crypto Industry Innovators ETF (NYSE: BITQ) that provides exposure to public companies that are involved in the Bitcoin and cryptocurrency sector. The ETF won’t be holding Bitcoin or Ethereum directly.
With this, it has become the first ETF with crypto in it to be approved by the SEC, while a Bitcoin ETF has yet to make it despite several, at least eleven, companies interested and having filed their applications.
But Hunter Horsley, CEO of Bitwise, is hopeful that SEC is moving closer to approving one.
“The bitcoin ETF journey has been almost a decade long,” Horsley told CNN. “But I think it will be possible. This is a big milestone for us.”
BITQ meanwhile seeks to track the Bitwise Crypto Industry Innovators 30 Index, which captures pure-play companies engaged in the crypto sector and has at least $100 million of liquid digital assets on their balance sheet.
Also, these companies derive at least 75% of their revenue from either directly holding crypto assets or serving the crypto market.
It basically tracks the performance of crypto stocks and not coins. A similar ETF (VanEck Vectors Digital Assets Equity – DAPP) has been launched by VanEck as well that trades on Nasdaq, London Stock Exchange, and Deutsche Boerse.
“Until recently, most great crypto innovators were private companies, but that’s changing rapidly. Today, there’s a growing set of public companies capitalizing on crypto,” said Matt Hougan, CIO of Bitwise.
Crypto exchange Coinbase (COIN), which recently went public, accounts for 11.63% of the index’s weightage joined by MicroStrategy, Galaxy Digital, Riot Blockchain, Voyager Digital, Canaan, Northern Data, Hive Blockchain, Bitfarm, and Marathon Digital Asset Holdings, along with PayPal, Square, Silvergate, and others.
“Over the past few years, many investors have had to watch from the sidelines as a select few have reaped the rewards of stellar cryptocurrency returns.”
“With BITQ, our aim is to make crypto investment opportunities available through traditional investing platforms and a familiar, liquid, and cost-effective ETF.”