Bitwise Asset Management is implementing third-party reserve proof for its Bitcoin and Ethereum ETFs to enhance transparency and investor trust.
Bitwise's New Transparency Strategy
Bitwise Asset Management is adopting new transparency measures for its Bitcoin and Ethereum ETFs. Partnering with The Network Firm, the company aims to improve its proof-of-reserves process. By implementing third-party verification and daily updates, Bitwise intends to boost transparency, marking a shift from its previous approach of publishing wallet addresses on its websites.
Investor Confidence Expected to Rise
The introduction of third-party proof-of-reserves could significantly influence investor confidence. Bitwise's initiative is expected to enhance transparency in the ETF sector. This improvement aligns with investor expectations following past crypto market crises and may result in rising institutional interest in Bitwise's ETF offerings.
DeFi Transparency Models Influence Bitwise
Historically, similar transparency efforts have been seen in DeFi protocols. Bitwise's adoption of proof-of-reserves follows previous industry demands for greater visibility post-FTX. "The process involves daily on-chain holdings verification, reconciling balances with the number of fund shares outstanding and replaces Bitwise’s prior practice of listing wallet addresses on its website. Bitwise plans to add a second layer of transparency in the coming weeks, with daily CPA-attested reports verifying asset balances and fund liabilities." This adoption could foster increased market participation and trust, mirroring ongoing industry efforts to safeguard investor interests.
The implementation of third-party proof of reserves by Bitwise represents a significant step towards enhancing transparency and investor trust in cryptocurrency ETFs, potentially improving conditions for investors.
