Bitwise Expands Crypto Investment Options with Ethereum ETFs
Bitwise Asset Management, the largest crypto index fund manager in America, has announced the launch of two pioneering Ethereum-themed Exchange-Traded Funds (ETFs): the Bitwise Ethereum Strategy ETF (ticker: AETH) and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (ticker: BTOP). With this groundbreaking move, investors now have the opportunity to gain exposure to Ethereum futures through the highly popular and regulated ETF format, marking a historic milestone in the cryptocurrency investment space.
Bitwise’s CEO, Hunter Horsley, emphasized the growing importance of Ethereum within the crypto ecosystem, stating, “Ethereum now has billions in revenue, millions of users, and thousands of distinct apps and developers. As the leading operating system for crypto, Ethereum has spread like wildfire. With blue-chip brands like Nike, Starbucks, Adidas, Pepsi, PayPal, JPMorgan, and others building and using applications on Ethereum, the momentum is only building. AETH and BTOP give investors the opportunity to participate in that growth with confidence through regulated ETFs.”
The rise of Ethereum-based applications in recent years has been nothing short of remarkable. Stablecoins, which serve as a payment alternative to traditional card networks, the Automated Clearing House (ACH), and SWIFT, have processed over $1 trillion in transactions in Q1 2023 alone, and the market has grown from virtually non-existent in 2019 to a substantial $125 billion today. Similarly, the total capital deposited across decentralized finance (DeFi) applications built on Ethereum has surged by a staggering 6,000-fold since 2019, reaching $40 billion today.
Bitwise’s Chief Investment Officer, Matt Hougan, highlighted the unique investment opportunity that Ethereum presents, stating, “The portfolio opportunity with Ethereum is broader than bitcoin. Some investors consider Ethereum an alternative, while others see it as a traditional growth investment. It has elements of both. Like alternatives, Ethereum’s correlation to traditional equities over the last two years has been low, and trending lower. At the same time, its increased usage and cash flows suggest it has the characteristics of a growth asset. That combination makes Ethereum a distinct asset in portfolios.”
To reinforce this point, historical performance data demonstrates Ethereum’s distinct return patterns relative to stocks over the past five years:
- Large cap equities (S&P 500 Index): 0.28 correlation.
- Blue-chip tech stocks (Nasdaq-100 Index): 0.33 correlation.
- Small-cap equities (Russell 2000 Index): 0.24 correlation.
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) is a significant addition to Bitwise’s extensive suite of professionally managed investment vehicles. Bitwise now offers more than 20 products, including ETFs such as the Bitwise Crypto Industry Innovators ETF (BITQ), Bitwise Bitcoin Strategy Optimum Roll ETF (BITC), Bitwise Web3 ETF (BWEB), and Bitwise 10 Crypto Index Fund (BITW), among others.
Bitwise’s commitment to providing investors with diverse options in the crypto space extends to private placement funds, multi-strategy solutions, and separately managed accounts, catering to a wide range of investment preferences.
Both ETFs, AETH and BTOP, will invest in regulated CME Ether and Bitcoin futures, providing investors with a regulated and efficient way to gain exposure to these digital assets. The fund custodian for both ETFs is the Bank of New York Mellon, with an expense ratio of 0.85%.
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