NYSE Arca has filed a listing and trading application for a new exchange-traded product (ETP) by Bitwise offering direct spot exposure to Bitcoin and Ethereum. The proposed Bitwise ETP aims to provide balanced exposure to Bitcoin and Ethereum, weighted according to their market capitalizations.
Underlying Assets and NAV Calculation
The Bitcoin-Ether ETP will be listed under NYSE Arca Rule 8.201-E, which governs Commodity-Based Trust Shares. Its main goal is to provide exposure to the value of its holdings, minus operational expenses and liabilities. The Net Asset Value (NAV) of the fund will be calculated daily using trusted CME CF pricing benchmarks for both Bitcoin and Ethereum. Bitwise has stated that this dual-asset ETP will provide a more transparent and reliable way to track the value of Bitcoin and Ethereum. The fund's pricing will closely reflect the true market value of the assets due to CME CF benchmark usage.
The Impact on the Crypto Market
If approved, this Bitcoin-Ethereum ETP would be the first of its kind in the U.S. market. Investors would gain access to both digital assets within a single fund, simplifying the process of diversifying their crypto portfolios. Bitwise’s past success with Bitcoin and Ethereum spot ETFs gives confidence in the potential of this new offering. The company currently manages $4.2 billion in assets under management with its existing ETPs.
Rising Competition in the ETF Space
However, Bitwise is not alone in its quest to offer crypto-related ETPs. Other players are also seeking approval for similar products. For instance, Franklin Templeton is awaiting approval for its Crypto Index ETF, which tracks Bitcoin and Ethereum, from the U.S. Securities and Exchange Commission (SEC). Unlike Bitwise's offering, the Franklin Templeton ETF is not market-cap-weighted. Meanwhile, Brazilian asset manager Hashdex has filed for its own Bitcoin-Ethereum ETF, the Hashdex Nasdaq Crypto Index US ETF. The exact timeline for this product's launch remains unclear.
While Bitwise’s filing with NYSE Arca has been made, it remains uncertain whether the SEC will approve this ETP for listing and trading. Given SEC’s cautious approach in approving cryptocurrency-related financial products, it’s unclear how the agency will respond. Additionally, the anticipated change in SEC leadership in 2025, including possible resignation of Chair Gary Gensler, may influence future decisions regarding crypto ETFs.
