The new Bitcoin token is photographed on $100 bills.
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A new exchange-traded fund from Bitwise, which began trading on Tuesday, will give retail investors and financial advisors access to a wide range of cryptocurrencies in one fell swoop, unlike previous ETFs that mostly tracked just one or two cryptocurrencies.
The Bitwise 10 Crypto Index ETF (BITW) holds the following 10 digital assets: Bitcoin, ether, XRP, Solana, chain link, Litecoin, CardanoAvalanche, Sui and Polkadot. The conversion makes BITW the first ETF from a major crypto asset manager that includes Avalanche, Sui and Polkadot, Bitwise CEO and co-founder Hunter Horsley told CNBC.
“This really significantly expands the audience that has access to these different assets. [and] Of course, even more so for assets that do not have a spot ETF,” Horsley said on Monday.
The fund provides access to crypto assets to financial advisors and other smaller investors using funds from an IRA or retirement account “where their only choice is to use ETFs,” the CEO said.
The ETF was converted from an index fund that held the same coins and begins trading with more than $1 billion in assets. In addition to broader trading and holding authorizations, ETFs offer other advantages over funds that may make them more attractive to some investors, including greater trading flexibility and tax efficiency, as well as lower fees.
This move follows the approval of a series of spot Bitcoin ETFs by the Securities and Exchange Commission in the US in January 2024. Since then, asset managers have been fighting for approval to launch ETFs that track a wider range of digital assets, from altcoins like Sui and Aptos to memecoins like the official Trump and Dogecoin.
The ETF is being launched amid a series of recent setbacks in the crypto market, which saw Bitcoin trading at just $85,000 earlier this month, more than 30% below its record high of just over $126,000 in October. Smaller coins with fewer institutional vehicles have been hit even harder by the recent selloff, raising the risk that this ETF will result in larger losses for smaller investors.
On the other hand, as the cryptocurrency market matures and coin trading becomes more self-sustaining, an ETF like this offers the potential for diversification, as a broad index fund like the S&P 500 does with stocks.
“It is the perfect time for many investors who have been paying attention since the launch of the Bitcoin ETF but want a more comprehensive solution to allocating to digital assets rather than picking specific assets and sizing a range of different exposures,” Horsley said.
Of course, exposure to the smaller coins in the fund is limited. BITW invests 90% of its holdings in assets held by existing single-coin exchange-traded products – Bitcoin, Ether, Solana and XRP. The total weight of all other tokens in the fund is limited to 10%.
The fund rebalances every month – more frequently than most ETFs, which rebalance quarterly or semi-annually.
Bitwise manages more than $15 billion in client assets and has a suite of more than 40 digital asset investment products.
BITW, which is technically an exchange-traded product, rose 1.5% on Tuesday at its new location on the NYSE Arca exchange.