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- Bitwise files to launch the first ETF focused on stablecoins and tokenized assets with SEC approval.
- The Bitwise ETF will offer exposure to blockchain firms and crypto-linked products with active management.
- As stablecoins and tokenized assets grow, Bitwise aims to provide regulated access to blockchain investments.
Bitwise Asset management has submitted an application to the U.S. regulators to establish the first exchange-traded fund (ETF) focused on stablecoins and tokenized assets. This action is a major advance towards integrating blockchain and conventional finance.
The submission was registered with the Securities and Exchange Commission (SEC) on September 16, which indicated the increasing overlap between conventional finance and the blockchain world.
The proposed Bitwise Stablecoin & Tokenization ETF will have active management under the Investment Company Act of 1940. It will also be monitoring a newly formulated Stablecoin and Tokenization Index by Bitwise, which will provide exposure to companies and products in these new areas. The ETF will give investors a diversified portfolio of stablecoins and tokenized real-world assets.
Stablecoin and Crypto-Focused Investment Strategy
The fund will be divided into two equal-weight categories. The former will contain equities of firms that engage in the issuance of stablecoins, blockchain infrastructure, and tokenization services. These investments will occupy half of the ETF assets.
The second category will target crypto-linked exchange-traded products, which are primarily blockchain infrastructure, with a minor part of it devoted to oracle tokens that connect off-chain data to the blockchain.
The equity section will consist of 20-30 publicly listed companies, each taking up to 15% of the overall allocation. The strategy will minimize concentration risk and still have substantial exposure to leaders in the blockchain industry.
The crypto-linked will comprise a maximum of 5 percent of oracle tokens, with a maximum contribution of 22.5 percent to a specific holding. Rebalancing of the fund will take place quarterly.
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Bitwise ETF Expected to Launch by November Amid Blockchain Surge
Bloomberg ETF analyst Eric Balchunas anticipates that the fund may be introduced as soon as the end of November, during Thanksgiving. This timeline is backed by the fact that the review process of 40 Act funds can be faster. Bitwise has not announced the management fees, but the ETF is likely to deliver controlled access to the fast-growing blockchain industry.
This filing is at a moment when stablecoins and tokenized assets are experiencing explosive growth. The supply of stablecoins amounts to approximately 290 billion now. In the meantime, the tokenized real-world assets reached a market value of $30.22 billion. The momentum behind this growth is the growing institutional and retail adoption.
Provided its approval, the ETF by Bitwise could become the first with a focus on stablecoins and tokenized assets. It will be competing with other crypto-linked funds, including the Crypto Income ETF by Nicholas Wealth (BLOX), but will have a special concentration on these new areas.
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