U.S. regulators are currently reviewing a proposal from NYSE Arca to list a Bitwise exchange-traded fund (ETF) that holds both Bitcoin and Ether, following a recent filing on December 10. This development marks a significant step as NYSE Arca, in partnership with Bitwise, submitted their application to the Securities and Exchange Commission (SEC) on November 26, aiming to create a spot cryptocurrency index fund comprising BTC and ETH.
The proposed Bitwise Bitcoin and Ethereum ETF seeks to provide investors with balanced exposure to the two largest crypto assets by market capitalization in a user-friendly format. This initiative aligns with a growing industry trend towards crypto index ETFs, which aim to offer efficient investment strategies similar to those found in traditional markets, like the S&P 500 ETFs.
Katalin Tischhauser, head of investment research at crypto bank Sygnum, highlighted in August the natural progression towards index ETFs in the cryptocurrency sector, emphasizing their efficiency and appeal to investors.
Crypto ETF Landscape
Following the initial filing for the Bitcoin and Ethereum ETF, NYSE Arca continued to expand its offerings. On November 27, it filed to list the Bitwise 10 Crypto Index Fund, which aims to encompass a broader array of digital assets. This move is part of a larger trend where exchanges and asset managers, including Hashdex and Franklin Templeton, are actively developing a variety of crypto index funds, intensifying competition within the sector.
Additionally, on October 29, NYSE Arca sought approval from the SEC to list the Grayscale Digital Large Cap Fund, another proposed index ETF that focuses on major digital currencies.
The landscape of cryptocurrency regulation in the U.S. is poised for significant changes with the upcoming presidential term of Donald Trump, who has committed to making the U.S. the “world’s crypto capital.” This political shift is anticipated to influence the regulatory environment significantly, especially with the departure of SEC Chair Gary Gensler, known for his stringent regulatory approach towards cryptocurrencies, on the day Trump assumes office.
Under Gensler’s leadership, which began in 2021, the SEC initiated over 100 regulatory actions against crypto companies, reflecting a proactive stance on cryptocurrency oversight. The industry now anticipates a more favorable regulatory climate under Trump’s administration, potentially easing the path for various proposed crypto funds, including those offering staking options.
| Event | Description |
|---|---|
| Bitwise ETF Filing Date | November 26, 2024 |
| Proposed Listing Date | December 23, 2024 |
| SEC Review Announcement | December 10, 2024 |
| Other Proposed Crypto ETFs | Grayscale Digital Large Cap Fund, Bitwise 10 Crypto Index Fund |
The progression of cryptocurrency from a niche investment to a mainstream financial asset is evident through the increasing acceptance of crypto ETFs like those proposed by Bitwise. These funds not only democratize access to digital assets but also signify a broader acceptance of crypto within the regulatory frameworks that govern traditional securities. As these developments unfold, they reflect a growing acknowledgment of cryptocurrency’s potential to integrate into the broader financial landscape, offering both retail and institutional investors novel ways to diversify their portfolios. This trend is likely to accelerate as regulatory barriers diminish, fostering a more inclusive and expansive financial market environment.
