The United States Securities and Exchange Commission (SEC) is seeking comments from industry stakeholders regarding NYSE Arca’s application to list a Bitwise exchange-traded fund (ETF) that holds both Bitcoin (BTC) and Ethereum (ETH). This development comes after Bitwise and NYSE submitted their filings to the SEC on November 26.
Background on Bitwise ETF
The proposed Bitwise Bitcoin and Ethereum ETF is designed to provide investors with a balanced exposure to the two largest cryptocurrency assets in an easily accessible format. According to Bitwise, the ETF aims to give investors "the ability to gain direct exposure to the performance of the spot market prices of BTC and ETH through a single investment vehicle."
Industry Analysts Weigh In
Industry analysts believe that crypto index ETFs are the next logical step for issuers after the successful listing of funds holding BTC and ETH in January and July, respectively. Katalin Tischhauser, head of investment research at Sygnum, a cryptocurrency bank, commented on this trend in August:
"The next logical step is index ETFs because indexes are efficient for investors — just like how people buy the S&P 500 in an ETF. This will be the same in crypto."
Competition Heats Up
The competition among issuers has intensified with several proposed crypto index funds, including those from Hashdex and Franklin Templeton, vying for listing on major exchanges.
Proposed Crypto Index Funds
- Bitwise 10 Crypto Index Fund: This ETF would hold a broader basket of cryptocurrency assets.
- Grayscale Digital Large Cap Fund: NYSE Arca has filed to list this proposed index ETF from Grayscale.
- Hashdex and Franklin Templeton Index Funds: These issuers are also seeking to list their respective index funds on major exchanges.
US Leadership and Crypto Regulation
The incoming administration under President-elect Donald Trump promises to be more crypto-friendly. With Gary Gensler departing as SEC Chair, regulators may adopt a softer stance on cryptocurrency regulation. This shift could create an environment conducive to the listing of various proposed crypto funds, including index ETFs.
Key Takeaways
- US regulators are soliciting comments on Bitwise’s application to list a BTC and ETH ETF.
- Industry analysts believe that crypto index ETFs will be the next big focus for issuers.
- Several proposed crypto index funds are vying for listing on major exchanges.
- The incoming Trump administration may adopt a more favorable stance towards cryptocurrency regulation.
Conclusion
The development of crypto index ETFs has the potential to democratize access to cryptocurrencies and make them more accessible to mainstream investors. As issuers continue to innovate and propose new products, it will be essential for regulators to strike a balance between facilitating innovation and protecting investors. The industry’s focus on crypto-friendly leadership in the US may also contribute to a more favorable regulatory environment.
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