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Bitwise: Facebook’s Libra Moved Bitcoin and Cryptocurrencies Ahead by Three Years

A cryptocurrency index fund provider Bitwise based in the US is of the opinion that the Facebook-owned stablecoin Libra has accelerated the growth of cryptocurrencies by three years. This was stated in a letter published to investors on August 1.

The attention given to Bitcoin by Libra

Libra, which has been gaining substantial attention since it’s the first announcement has gained different reactions around various sectors of the world, particularly the political and the fintech sphere.

Bitwise’s global head of research Matt Hougan, issued a statement on behalf of the company.

“Thanks to Facebook’s Libra and Congress, we have just fast-forwarded two or three years into crypto’s future, accelerating all the conversations, debates, and mainstream discussions into the present day.”

The firm had also noted that it expects the government to beef up regulations in shady areas that are being exploited by fraudsters.

Image credit to Bitwise

Bitwise Recruits BNY Mellon as Transfer Agent for Proposed Bitcoin ETF

Bitwise has recruited the services of Bank of New York Mellon to act as the administrator and transfer agent for its proposed Bitcoin (BTC) exchange-traded fund (ETF).

On Wednesday, Bitwise amended its Bitcoin ETF S-1 form listing BNY Mellon as the administrator, transfer agent and ETF custodian. The amendment also listed Foreside Fund services as the marketing agent and Cohen & Co. as an auditor.

The above firms, however, must wait on the decision of U.S. financial regulators before they can assume their appointed roles. Bitwise has a short of history of delays and setbacks when dealing with the regulators but a final decision is expected by October 23 of this year.

Recently partnering with Bakkt to work on BTC futures, BNY Mellon has remained very active in the cryptocurrency space. Since 2015 it has worked on the development and integration of blockchain technology and currently holds over $33 trillion in assets.

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‘The SEC Has to Give its Decision: Yes or No’ to Bitcoin ETF Approval, says Bitwise

The Securities and Exchange Commission (SEC) previously set an Oct. 13 deadline for approving Bitwise Investments’ Bitcoin exchange-traded fund (ETF). With Bitcoin’s high volatility this year, its performance in 2019 remained bullish, although falling by over 20% in one week in September. Bitcoin reached its lowest level in July while hitting its high of over $11,000 in June 2019.

Matt Hougan, managing director and global head of research at Bitwise, is still optimistic about the prospects of getting his firm’s Bitcoin ETF approved. Hougan explained:

“Yes, we submitted a lot of research to the SEC and met with them multiple times. Just the evolution of the Bitcoin market is from night to day, and that’s why I think we’re closer than we have ever been before to getting a Bitcoin ETF approved.”

‘Custody has solved our problem in crypto’

Hougan mentioned the role of custody in the development of Bitcoin, “I’d say custody has really solved our problem in crypto right now. There are a large number of regulated, insured custodians with hundreds of millions of dollars of insurance in place.”

Hougan believes that the issue of market surveillance and market quality are areas people are going to focus on. The investment firm has done a lot of research on where the real nature of the Bitcoin market is. “People’s views of Bitcoin are often anchored a few years ago when it was a wild west.”

Extended research by the firm has shown that the market is truly efficient. The key is the growth of the regulated growth of the CME Bitcoin futures market, which is trading more than $200 million a day, which is around 20-30% of the Bitcoin spot market. This is a significant indicator because the SEC stated that “if there is a large, significant regulated derivatives market trading side-by-side with the Bitcoin spot market, that can solve the problem of market surveillance,” explained Hougan.

One of the most exciting wealth generation opportunities

“The opportunity that’s been taking place in crypto, Bitcoin, and blockchain today is one of the most exciting wealth generation opportunities in the world. You know that because Bitcoin is the single best performing asset over the last five years up about 2000%.”

Hougan explained that if the Bitcoin ETF is approved, users will have “safe, simple, secure” access to the wealth generation taking place in Bitcoin and crypto.

What are the alternatives for the SEC?

Hougan added, “sometime before Monday, the SEC has to give its decision: yes or no. They have no more ways to postpone it at this point. We will hear clearly between now and Monday what they think, and then, depending on what we hear, we’ll go forward from there. But it should be a very exciting week.

Bitwise expects the SEC to provide detailed guidance on which questions they think have been successfully answered, and which ones, if any, remain. The firm will then understand how close they are to the “goal line” if they are “all the way in” or “a few yards outside.”

US SEC Rejects Bitwise Proposal to List Bitcoin ETF

The United States Securities and Exchange Commission (SEC) has rejected a proposal filed by Bitwise Asset Management to list a Bitcoin (BTC) exchange-traded fund (ETF).

On Wednesday, the US SEC finally made a decision on the Bitcoin ETF filing by Bitwise and NYSE Arca, stating that the applicants did not meet the necessary requirements pertaining to possible market manipulation and illicit activities, and thus rejected the rule change.

The Sec offered the following explanation, “The Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca has not met its burden under the Exchange Act and Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be designed to prevent fraudulent and manipulative and practices.”Bitcoin ETF Unwarranted Optimism

The response from the SEC appears to be in stark contrast to Bitwise’s Managing Director and Global Head of Research, Matt Hougan’s recent display of optimism on Oct.7 when he commented, “We’re closer than we’ve ever been before to getting a Bitcoin ETF approved.”

Hougan has been vocal in his belief that perceptions of Bitcoin have radically changed and seemed convinced that the firm’s chances to land approval for a physically-held Bitcoin ETF were good. Hougan had cited the significant growth in cryptocurrencies and the role of custody in the development of Bitcoin as evidence stating, “I’d say custody has really solved our problem in crypto right now. There are a large number of regulated, insured custodians with hundreds of millions of dollars of insurance in place.”

The rejection of Bitwise’s proposal is another episode in a series of setbacks and delays from the SEC. The regulators had previously postponed making a decision on the proposal until Oct. 13 along with two other ETF proposals by VanEck Solidex and Wilshire Phoenix.

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US SEC Reopens Rejected Bitwise BTC ETF For Review

The United States Securities and Exchange Commission (SEC) has announced that it will revisit and review its previous decision to reject Bitwise Asset Management and NYSE Arca’s filing for a Bitcoin (BTC) exchange-traded fund (ETF).

On Nov. 18, the SEC announced that the ETF filing from Bitwise Asset Management and NYSE Arca will return to review, following the October rejection for not meeting the necessary requirements.

The SEC initially rejected the Bitcoin ETF filing on the grounds that the applicants were unable to meet the necessary requirements pertaining to possible market manipulation and illicit activities in October.

However, now that the regulator has announced that it will take a second look at the proposal, any party or person may file a statement, either in support or in opposition to, the proposed action made in accordance to SEC, no later than Dec. 18, 2019.

The regulatory commission further highlighted that the order to disapprove the proposed listing of the ETF filing from Bitwise Asset Management and NYSE Arca will remain in effect pending the SEC’s review.

The major concern which has so far been cited by the SEC to evaluate crypto ETFs is whether the underlying market is resistant to market manipulation.

In its previous rejection the SEC the following explanation, “The Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca has not met its burden under the Exchange Act and Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be designed to prevent fraudulent and manipulative and practices.”

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VanEck Makes the Case for Institutional Bitcoin Investment

VanEck has outlined the case for institutional Bitcoin (BTC) investment in a report published on Jan. 29. According to the investment management firm, even a small amount of BTC allocation could improve a portfolio’s upside.

As shown in the report, Bitcoin has a history of outperforming tradition asset classes as well as a track record of strong growth over longer three to five year periods. Bitcoin also enhances the diversity of a portfolio as its movements bear very little correlation to the broad market equity indices, bonds and gold.

Source: VanEck – The Investment Case for Bitcoin

As shown in the chart below, the report finds, “A small allocation to Bitcoin significantly enhanced the cumulative return of a 60% equity and 40% bonds portfolio allocation mix while only minimally impacting its volatility.”

Source: VanEck – The Investment Case for Bitcoin

Despite the evidence presented, VanEck’s report explains that the main deterrent for institutional adoption Bitcoin revolves around the lack of infrastructure to connect it to capital markets and its nature as a bearer asset.

VanEck explains that BTC is not quite a currency but still has the potential to become one. The report also suggests Bitcoin bears the necessary features that could see it become a digital gold, but its future monetary value hinges heavily on how people’s perceptions of its value develop.

BTC Exchange Traded Funds

The report highlighted the crypto industries momentum being carried into 2020, citing regulatory achievements in Colorado and Wyoming and the launch of physically settled BTC futures.

The reports also mention the Exchange Traded Funds(ETF)s that are under consideration and mention that the previously withdrawn VanEck-SolidX proposal is back in the race and slated to be reviewed next.

One BTC Exchange Traded Fund that we will not see in 2020, or anytime soon, is the highly anticipated Bitwise ETF.

On Jan. 14, Bitwise submitted a note to the US Securities and Exchange Commission (SEC) requesting the registration withdrawal. The cryptocurrency asset management firm cited the move as being consistent with “public interest” and “protection of investors.”

According to an article by The Block, Matt Hougan, Global Head of Research, Bitwise confirmed, “We did indeed withdraw the application. This is a procedural step, and we intend to refile our application at the appropriate time.”

Upon its initial filing, Bitwise received a 112-page response from the SEC and Hougan added that the firm is currently working this document but remains committed to the development of the Bitcoin ETF.

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Bitwise Adds Blue-Chip NFT Index Funds to its Big Bag

San Francisco-based digital asset management firm, Bitwise has announced the launch of its Blue-Chip NFT Index Fund, a product it said will be available to accredited investors in the United States.

According to Bitwise, investors can gain access to the Blue-Chip NFT Index fund with a $25,000 minimum investment, and the fund gives investors access to 10 of the most prestigious NFT collections around today.

The Bitwise Blue-Chip NFT Index Fund Component

The Bitwise NFT Index has a total of 10 NFTs with CryptoPunks carrying a weight of 36.5% of the index. Bored Ape Yacht Club (BAYC), an NFT collection with a representation deal with Guy Oseary, Madonna and U2’s manager, takes a 29.6% weight of the Index. Other constituents include Mutant Ape Yacht Club, VeeFriends, Autoglyphs, Fidenza, CyberKongz Genesis, Cool Cats NFT, Meebits, and Chromie Squiggle.

The portfolio of the NFT Index Fund will be readjusted every 3 months and new projects may be fit to replace the existing ones if certain criteria are met. The defined criteria include market capitalization of the NFT, category, collection size, and liquidity amongst others.

“The Fund seeks to track an index of the most valuable (as defined by market capitalization) and well-established NFT collections in the Arts and Collectibles sector. Collections considered for inclusion in the Fund are monitored for certain risks as set forth in the index, selected and weighted based on an adjusted floor price market capitalization, and rebalanced quarterly.”

Pioneering Crypto Index Innovations

Bitwise occupies a very pivotal position and innovation space in terms of the crypto index fund . The company has two publicly traded index funds and several funds that are reserved for accredited investors only.

Bitwise is amongst the startups in the crypto industry that has been trying to convince the Securities and Exchange Commission (SEC) to approve a Bitcoin Exchange Traded Fund (ETF) product in the U.S. The company’s previous attempts have been met with rejection from the SEC, and the firm is capitalizing on its lessons thus far not to give up on its ambitions to list the product.

Would the U.S. Finally Approve Spot Bitcoin ETF in 2022?

It is a new year and a time investors are positioning their minds toward new possibilities. Trading in 2021 had experienced its ups and downs in all aspects of the cryptocurrency ecosystem, but historical records were also set.

For instance, Bitcoin printed several all-time highs (ATHs), the latest price level above the $68,000 traced back in November.

Some of the ‘Firsts’ in the Crypto Ecosystem in 2021

The digital currency ecosystem recorded a few events that happened for the very first time in 2021. Tesla’s Chief Executive Officer, Elon Musk came out more openly to back Bitcoin in the first quarter, leading his firm to buy up $1.5 billion worth of the premier coin back in February last year. While this was not the first bullish gesture from an institutional investor, it marked the first from one of the most prestigious auto brands in the world.

Also in 2021, Bitcoin became the official legal tender of the Central American nation, El Salvador. After facing a number of criticisms from the World Bank and the International Monetary Fund (IMF), El Salvador floated its Bitcoin law on September 7 with assistance from the Central American Bank for Economic Integration (CABEI).

Counting the number of firsts, Chinese authorities stood their ground on the crypto ban in the country and significantly caused a shift in the mining hashrate to sway from China. Regulations in the United States were a matter of mild concern, but mostly on the productive side as the SEC approved the trading of ProShares Bitcoin Futures-based Exchange Traded Fund (ETF).

Hopes for a Spot Bitcoin ETF this Year

America is becoming more aware of the benefits and impacts of digital currencies, and the SEC is not oblivious to this fact. While the market watchdog had done the best it could do in the past year to approve ProShares Futures ETF, the gesture has sent more fund managers to keep hopes alive that at least one of the tens of Bitcoin spot ETF applications filed with the SEC will gain approval this year.

From Fidelity to Grayscale to Bitwise amongst others, the race to float an actual Bitcoin ETF is just heating up and expectations from the investing community remain high as the year resumes the first trading week in a few hours.

Bitwise Offers Actively Managed Strategies to Institutional Investors

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Bitwise Asset Management, a crypto index fund manager, based in San Francisco, announced Tuesday the launch of actively managed crypto strategies to serve the needs of institutional investors.

The firm said it designed the active crypto trading strategies to capitalize on market inefficiencies to cater to institutional clients’ needs.

Bitwise further stated that it had hired Jeffrey Park, formerly of Corbin Capital and Morgan Stanley (MS), to be in charge of a newly launched dynamic strategy trading team to manage the new portfolio.

The company said its expansion into actively managed crypto strategies has been driven by rising institutional demand for liquid crypto opportunities.

The move by Bitwise follows Cathie Wood’s investment firm, ARK Investment, which recently launched two actively managed crypto strategies designed for registered investment advisors. The strategies are offered as separately managed accounts (SMAs) through a partnership with the digital asset platform Eaglebrook. Blockchain.News reported the matter on October 4.

In April, crypto-focused wealth management platform Abra also launched its asset management arm that offers actively managed funds to institutional investors and asset managers, enabling them to trade and borrow crypto and earn interest on their crypto investments.

The above developments signal that institutional demand for more actively managed cryptocurrency investments is on the rise as asset managers have begun addressing this neglected landscape’s needs.

While buying and holding emerged as the most prominent approach to investing in digital assets, actively managed digital asset investment strategies now appear to offer a risk-optimized alternative for investors seeking to capitalize on the crypto market’s growth and volatility.

As the name suggests, actively managed investment strategies involve actively managing a portfolio to maximize returns while minimizing risk.

Through a combination of algorithmic trading strategies – normally executed automatically on trading platforms via APIs – actively managed crypto funds are able to generate returns even during a crypto winter or market correction.

Besides, potentially generating returns in falling markets, actively managed investment strategies also benefit investors who face difficulty managing crypto market volatility.

Bitwise ETF BITQ Surpasses $100M in Cypto Assets Under Management

Bitwise Asset Management, a leading crypto asset manager, has announced that its Crypto Industry Innovators ETF (NYSE: BITQ) recently surpassed $100 million in assets under management. This milestone comes amid a turning point for the crypto sector, which has seen positive industry developments, strong market performance, and growing investor interest throughout 2023.

As of June 30, bitcoin had risen more than 83% year-to-date, while BITQ was up more than 135% over the same period. Since the fund’s inception in 2021, investors have utilized BITQ for its potential impact on portfolio diversification and as a way to access an emerging growth sector through a traditional equity ETF vehicle.

The BITQ ETF seeks to track an index designed by Bitwise that consists of leading companies driving the fast-growing crypto economy. At each rebalancing, at least 85% of BITQ’s holdings are “pure-play” firms, which derive more than three-quarters of their revenue from crypto-related businesses, while up to 15% of holdings are reserved for more diversified companies making meaningful investments in the space.

Bitwise has also been in the news recently for its refiling of a spot Bitcoin ETF application with the SEC, which was officially acknowledged by the regulatory body. Bitwise first filed for a spot Bitcoin ETF in October 2021, but amended and refiled their application on June 28 of this year. This move followed a host of institutional applications, fueled by BlackRock’s June 15 spot Bitcoin ETF application.

Bitwise’s Chief Investment Officer, Matthew Hougan, emphasized the importance of BlackRock’s move, stating, “You have to listen when Blackrock comes to the market, because they’re the largest ETF issuer in the world, they are very careful and connected.”

Founded in 2017, Bitwise manages a broad suite of 18 professional investment solutions, including ETFs, publicly traded trusts, SMA strategies, multi-strategy solutions, and private funds. Today, over 1,800 wealth teams, RIAs, family offices, and institutional investors leverage Bitwise to understand and access crypto markets strategically.