Bitwise Asset Management announced that NYSE Arca has filed a Form 19b-4 to list the $1.3 billion Bitwise 10 Crypto Index Fund (BITW) as an ETP, joining a growing trend of crypto asset managers looking to convert investment vehicles into exchange-traded structures.
“Bitwise believes that ETPs are among the most efficient, convenient and useful means of providing crypto exposure,” Hunter Horsley, CEO of Bitwise, said in the announcement. “We remain committed to converting BITW into an ETP.”
Launched in November 2017 as the world’s first crypto index fund, BITW offers investors exposure to a diversified portfolio of digital assets, with stocks currently listed on the OTCQX Best Market, the press release said.
The current fund holds 10 of the largest cryptocurrencies, with bitcoin making up 74.8% of the portfolio, followed by Ethereum at 16.2% and Solana at 4.4%, according to the fund page. The remaining allocations are spread across smaller cryptocurrencies including XRP, Cardano and Avalanche.
The conversion effort is intended to improve the fund’s efficiency and regulatory protections, the announcement said. An ETP structure would accept subscriptions and redemptions at net asset value, creating an arbitrage mechanism that could help the fund trade closer to its underlying value.
The fund currently trades at $52, while it has a net asset value of $62, highlighting the premium/discount issues that a conversion must address.
The filing follows Grayscale’s recent move to convert its Digital Large Cap Fund into an ETF structure. Grayscale already successfully converted its Bitcoin and Ethereum trusts into ETFs earlier this year.
Read more: Grayscale search SEC nod for multi-crypto ETF conversion
BITW currently has an expense ratio of 2.5% and has generated returns of 50.2% and 108.9% year-to-date in secondary market trading last month, compared to 30% and 81.8% respectively for the underlying crypto index, according to the fund page.
If successful, the conversion would mark another milestone in Bitwise’s efforts to broaden access to cryptocurrency investments through regulated vehicles. The company first registered BITW as a Securities and Exchange Commission reporting company in April 2021, providing additional transparency for investors, the press release said.
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