- Bitwise recently registered for a prospectus with SEC
- The proposal mentions the project with the name of Bitwise Crypto Innovators ETF
- It will trace the performance of institutions involved in the Bitwise Crypto Innovators Index
Bitwise, a crypto-oriented asset regulator and index supplier, recently registered for a prospectus. It aims to establish a new exchange-traded fund that will trace the performance of crypto innovators.
The historic Bitwise prospectus
The proposal mentions the project with the name of Bitwise Crypto Innovators ETF. It will then trace the performance of institutions involved in the Bitwise Crypto Innovators Index, while the Bitwise Index Services will assemble them.
The idea emerged as a part of other attempts from Bitwise to work on crypto-centric products. Bitwise declared on February 2 that it is all set to list its Bitcoin fund on OTC Markets. If verified, the fund will be traded in a similar pattern to the $24.4bn Grayscale Bitcoin Trust. The latter is already registered with the OTC Markets’ OTCQX venue.
On February 5, Bitwise submitted a file with the Securities and Exchange Commission. The entity mentioned that crypto innovators are firms that facilitate services and transactions in a very specific sector of the economy. These firms, as per the file, deals primarily with crypto assets and shared ledger technology.
The respective section of crypto innovators could involve a wide range of institutions. These companies include trading networks, custodians, and wallet suppliers, and firms with financial services holding these respective technologies miners. Apart from these, there are also hardware institutions, and providers that hold a prominent amount of crypto assets or otherwise produce benefits associated with distributed ledger technology or crypto assets.
The filing highlights
The filing highlights the rules of screening of the Innovators Index. 70% of the index will consist of companies that source more than 3/4th of their income from providing services or transactions related to the crypto sector. The alternate option would be the firms with assets holdings majorly denominated in crypto. Such institutions should also hold a market financing of $100 million.
The Bitwise committee will identify some giant firms as crypto innovators based on their devoted business initiative in the space. Moreover, they should be mentioned in at least one of their current quarterly or annual reports. These firms will then constitute the remaining index. The firms constituting this section of the index are expected to have a minimum market capitalization of $10 billion.
Thus, the recommended fund will not invest in cryptocurrencies via derivatives or directly. It will also not put its stake in initial coin offerings.
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