In a recent update to its S-1 filing, Bitwise has revealed plans for a substantial $200 million seed investment for its spot Bitcoin exchange-traded fund (ETF). This amount is significant, as it’s 20 times larger than the $10 million seed investment announced by BlackRock for its spot Bitcoin ETF. The updated filing was submitted by the Dec. 29 deadline set by the Securities and Exchange Commission (SEC), with the agency expected to announce the first wave of approvals or rejections for spot Bitcoin ETFs in early January 2024.
One notable detail from Bitwise’s filing is the absence of a named authorized participant (AP) for the ETF. In contrast, BlackRock has named Jane Street and JP Morgan as its authorized participants. This lack of a named AP has raised questions about Bitwise’s strategy in comparison to its competitors. Eric Balchunas, a Senior ETF Analyst at Bloomberg, believes that the sizable seed funding provided to Bitwise could give the company a competitive edge in the early stages of the ETF market.
The decision by the SEC on Bitcoin Spot ETFs is of great significance to the cryptocurrency market, especially as the industry anticipates the Bitcoin halving event scheduled for April 2024. The approval of these ETFs could potentially open the doors to a broader range of investors, leading to increased liquidity and stability in Bitcoin’s prices.
Bitwise’s $200 million seed fund announcement comes amid a flurry of activity among other potential ETF issuers. Most spot Bitcoin ETF hopefuls have updated their S-1 filings, with a potential approval date from the SEC set for Jan. 10, 2024, at the earliest. Despite the lack of a named AP in its filing, Ark Invest has heavily mentioned plans for an authorized participant. Valkyrie Investments has named Jane Street Capital and Cantor Fitzgerald as authorized participants in its updated application, while firms like VanEck have started advertising campaigns in anticipation of positive news from the SEC.
Bitwise’s confidence in the potential success of its spot Bitcoin ETF is evident in its substantial investment. The company has even gone as far as to predict that the ETF will be the most successful financial product in history. In addition to its Bitcoin ETF plans, Bitwise is also looking to launch a spot Ethereum ETF in the near future.
The anticipation surrounding the SEC’s decision on Bitcoin Spot ETFs goes beyond regulatory compliance and is seen as a potential catalyst for the next phase of growth and adoption in the cryptocurrency market. With significant investments and updates from various issuers, the market is bracing for a potential influx of new capital and increased mainstream adoption.