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San Francisco-based Bitwise Asset Management has filed a registration statement for a publicly-offered cryptocurrency index ETF with the Securities and Exchange Commission. The company said in a statement that the new ETF will track the returns of Bitwise’s market-cap-weighted index of the 10 largest cryptocurrencies, the HOLD 10 Index. It is intended to serve both retail and institutional investors.
The company’s co-founder and CEO, Hunter Horsley, says the index is a valuable tool for investors because it is not tied to the performance of any one coin. “What things will look like five or ten years from now is pretty unclear,” Horsley told Forbes. “The HOLD 10 index offers broad exposure, it updates monthly and changes to adapt to the market.”
According to a statement from Bitwise, the index uses a 5-year-diluted market cap and other eligibility criteria to mitigate the challenges of investing in the crypto space, like “continuously changing supply, liquidity, trade volume concentration, and custody limitations.”
The HOLD 10 Index is currently comprised of bitcoin, ether, XRP, bitcoin cash, lumens, litecoin, dash, zcash, monero, and ether classic. Bitwise also offers a fund for accredited investors based on the HOLD 10 Index, which is among the earliest privately-offered cryptocurrency index funds.
The SEC has yet to approve a cryptocurrency-based ETF. It rejected an application for a bitcoin-based investment vehicle by Cameron and Tyler Winklevoss, founders of the cryptocurrency exchange Gemini, in 2017, and in June sought public comment on an application by the CBOE for a bitcoin-based ETF.
“We expect the staff of the SEC has had ongoing discussions with the investment firms making the crypto filings to date, and we look forward to having our own discussions with the SEC about the nature of our proposed offering,” Bitwise Global Head of Exchange-Traded Products John Hyland said in a statement.
Matt Hougan, Bitwise’s Global Head of Research, told Forbes that he hopes to see more investors have access and exposure to regulated products. “It will be a net positive for investor protections when we get to the point that the SEC is comfortable to greenlight one of these funds,” he said.