Bitwise launches crypto ETF (but not exactly the kind everyone’s waiting for)

San Francisco-based crypto investment company Bitwise Asset Management has announced the launch of its Bitwise Crypto Industry Innovators (BITQ) exchange-traded fund on Wednesday.

“Until recently, most great crypto innovators were private companies, but that’s changing rapidly. Today, there’s a growing set of public companies capitalizing on crypto and more to come. BITQ aims to identify these businesses and give investors access,” said Bitwise chief investment officer Matt Hougan in the announcement.

Capturing ‘pure-play’ companies

An ETF is a special type of security that tracks market movements of a certain asset or a whole basket of them. For example, a Bitcoin or crypto-focused ETF could allow institutional investors to get exposure to digital assets’ without actually holding them. At the same time, ETFs are tradeable on traditional exchange platforms.

However, several companies, including Bitwise itself, have filed their applications for a Bitcoin ETF with the Securities and Exchange Commission over the past few years, but the regulator has turned them all down so far.

While it may sound similar, Bitwise’s new crypto-focused ETF is a somewhat different beast. Per the press release, BITQ aims to allow investors to get exposure to valuable public companies in the cryptocurrency sector—instead of coins themselves.

“BITQ seeks to track the Bitwise Crypto Industry Innovators 30 Index, designed with Bitwise’s industry expertise to capture ‘pure-play’ companies engaged in actual, material activity in the crypto sector. Additionally, the index includes companies with at least $100 million of liquid crypto assets on their balance,” the company explained.

Tailored needs of crypto

Additionally, the ETF was designed “specifically to capture the unique characteristics of the crypto equity market.” For example, it has a so-called “fast-entry” rule, allowing firms that conduct initial public offerings or direct listing to enter the index just one day after their debut “to quickly adapt to the rapidly changing market.”

Bitwise CEO Hunter Horsley also pointed out that over the past few years, many investors were unable to ”reap the rewards of stellar cryptocurrency returns.” Simultaneously, Bitwise’s clients have been asking the company to find a way for them to access the crypto space. And BITQ is the company’s answer to that.

“With BITQ, our aim is to make crypto investment opportunities available through traditional investing platforms and a familiar, liquid, and cost-effective ETF. We are thrilled to see this space continue to grow as investors increasingly gravitate toward this transformative asset class,” explained Bitwise CEO Hunter Horsley.

Meanwhile, the fate of crypto-focused Bitcoin ETFs pegged to the actual cryptocurrency is still uncertain in the U.S.

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