The U.S. Securities and Exchange Commission has given preliminary approval to a Bitcoin and Ethereum exchange-traded fund from Bitwise Asset Management. The move, taken on January 30, 2025, is a huge stride toward the mainstreaming of cryptocurrency investment and will expose both of the leading digital assets.
Key Approval Details
The SEC approved Bitwise’s Form 19b-4, a key step in allowing the ETF to trade, although the ETF still awaits a separate approval for its Form S-1 registration application before it can hit the market. The proposed “Bitwise Bitcoin and Ethereum ETF” will track the spot prices of Bitcoin (BTC) and Ethereum (ETH), with its allocations corresponding to their respective market capitalizations; 83% for Bitcoin and 17% for Ethereum, as of the filing date.
The filing describes the ETF will calculate market capitalization by multiplying pricing benchmarks by the current circulating supplies of these cryptocurrencies. This explicitly ties the performance of the ETF to the price movements of BTC and ETH.
Management and Custody
Bitwise Investment Advisers will be the managers of the ETF, with Coinbase Custody providing custody services. The Bank of New York Mellon will act as the admin, cash custodian, and transfer agent. That structure should give investors more confidence in the operations of the fund.
Industry Context and Implications
This was preceded by related approvals from the SEC, first for the Hashdex and later for the Franklin Templeton spot ETFs. While this trend continues, it seems to signal the acceptance of cryptocurrency-backed investment products, and shows signs that the SEC is becoming quite familiar with these markets.
Bloomberg ETF analyst Eric Balchunas said the fast-tracked approval process, completed in a record 45 days, could signal the SEC will be more efficient going forward in processing ETF applications. But he also cautioned against making broad assumptions based on this single case.
Market Response
The market has responded favourably to this approval, with many analysts believing it shows bullish sentiment from the crypto community. According to Bloomberg Intelligence’s Nathan Dean, issuers are actively pushing the boundaries set by the SEC with novel filings ranging from those on memecoins ETFs.
Bitwise has also been optimistic about the bull run of cryptocurrencies, stating that “the path to full mainstream crypto adoption is clearer than ever.” The company believes the evolving regulatory environment will help bring about wider acceptance of digital assets.
Future Prospects
Bitwise has said it’s planning to diversify its offerings. The company recently applied for a spot Dogecoin ETF and announced plans to issue more ETFs targeting memecoins. All of these point toward rising interest from institutional investors in the strong potential for crypto investment over a couple of years ahead.
Last but not least, SEC approval of the Bitwise Bitcoin and Ethereum ETF, is the milestone in the integration efforts for digital assets into traditional financial markets. The investment vehicle pathway for cryptocurrencies continues to grow more solid as the regulatory frameworks keep on developing.
