Bitwise Expands Crypto ETF Lineup with Ethereum and Bitcoin Equal Weight Strategies
Bitwise Asset Management, the largest crypto index fund manager in the United States, has announced the launch of two innovative Ethereum-themed ETFs. These groundbreaking funds, the Bitwise Ethereum Strategy ETF (AETH) and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP), are set to begin trading on Monday, October 2, 2023.
What makes these ETFs particularly noteworthy is that they will provide investors with exposure to CME Ether futures through the regulated and widely popular ETF format, marking a historic moment in the cryptocurrency investment realm.
Bitwise CEO Hunter Horsley expressed his enthusiasm for the Ethereum ecosystem, stating, “Ethereum now has billions in revenue, millions of users, and thousands of distinct apps and developers.” He further emphasized Ethereum’s growing influence, highlighting that renowned brands such as Nike, Starbucks, Adidas, Pepsi, PayPal, JPMorgan, and others are actively building and utilizing applications on the Ethereum blockchain. Horsley noted, “The momentum is only building. AETH and BTOP give investors the opportunity to participate in that growth with confidence through regulated ETFs.”
Ethereum has witnessed remarkable progress in recent years, particularly in the realm of decentralized finance (DeFi) and stablecoins. Stablecoins, which serve as an alternative to traditional payment networks, processed over $1 trillion in transactions in the first quarter of 2023 alone. Additionally, the total capital locked in DeFi applications built on the Ethereum blockchain has surged 60-fold since 2019, reaching $40 billion.
Bitwise CIO Matt Hougan highlighted the unique investment opportunity Ethereum presents, stating, “The portfolio opportunity with Ethereum is broader than bitcoin.” He explained that some investors view Ethereum as an alternative investment, while others see it as a traditional growth asset due to its low correlation with traditional equities over the last two years. Simultaneously, Ethereum’s increased usage and cash flows suggest it possesses characteristics of a growth asset.
Historical performance data corroborates Ethereum’s distinct return patterns relative to stocks, with median correlations of 0.28 with large-cap equities (S&P 500 Index), 0.33 with blue-chip tech stocks (Nasdaq-100 Index), and 0.24 with small-cap equities (Russell 2000 Index) over the past five years.
Hougan added, “We find that, to some investors, Ethereum makes more intuitive sense than bitcoin. Every time people use an Ethereum-based app, they pay a fee in Ethereum, which ultimately accrues value to investors in a manner similar to stock buybacks. With cash flows and real-world applications, Ethereum is often easier to grasp and value for experienced investors.”
The launch of the Bitwise Ethereum Strategy ETF (AETH) and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP) expands Bitwise’s extensive suite of professionally managed cryptocurrency investment vehicles, which already includes five ETFs and a range of other products.
Bitwise’s commitment to delivering innovative crypto investment solutions has solidified its position as one of the leading crypto asset managers in the industry. With a focus on providing quality education and research, Bitwise aims to empower financial advisors and investment professionals seeking to navigate the complex world of cryptocurrencies.
For those interested in these new ETFs, the Bitwise Ethereum Strategy ETF (AETH) invests in regulated CME Ether futures, with the fund custodian being Bank of New York Mellon and an expense ratio of 0.85%. On the other hand, the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP) offers equal exposure to regulated CME Bitcoin Futures and CME Ether Futures, with similar custodial arrangements and expense ratios.
In conclusion, Bitwise’s latest ETF offerings represent a significant milestone in the cryptocurrency investment space, providing investors with a regulated and accessible means to tap into the Ethereum ecosystem’s growth potential. With Ethereum’s increasing adoption and real-world applications, these ETFs offer a compelling opportunity for investors seeking exposure to the world of cryptocurrencies in a secure and regulated manner.
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