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Crypto investment startup Bitwise is seeking regulators’ permission to offer an exchange-traded fund (ETF) tied to the top 10 cryptocurrencies.
The Bitwise HOLD 10 Cryptocurrency Index Fund ETF would track the returns on the startup’s HOLD 10 Index. That index is the basis for a passive investment fund which itself invests in the top 10 cryptocurrencies by market capitalization. This fund “captures approximately 80 [percent] of the total market capitalization of the cryptocurrency market,” the company said Tuesday.
According to a press release, the ETF proposal addresses issues surrounding supply, liquidity, trade volume and custody, which are areas the SEC has expressed concern about in the past.
The proposal, filed with the SEC, differs from other ETF applications under the agency’s review in that it lists multiple cryptocurrencies as part of the fund, and not just bitcoin.
An ETF is a marketable security that tracks a group of assets and is traded like stocks on an exchange. While other companies have filed for Bitcoin-only ETFs, Bitwise is the only firm to apply for an ETF that would track multiple digital assets.
Matt Hougan, the Bitwise global head of research told , “We’re joining the queue. The market is professionalizing in a direction that the SEC would allow a crypto ETF onto the market.”
The HOLD 10 Index is currently comprised of bitcoin, ether, XRP, bitcoin cash, lumens, litecoin, dash, zcash, monero, and ether classic. Bitwise also offers a fund for accredited investors based on the HOLD 10 Index, which is among the earliest privately-offered cryptocurrency index funds.
The SEC has yet to approve a cryptocurrency-based ETF. It rejected an application for a bitcoin-based investment vehicle by Cameron and Tyler Winklevoss, founders of the cryptocurrency exchange Gemini, in 2017, and in June sought public comment on an application by the CBOE for a bitcoin-based ETF.