The U.S. Securities and Exchange Commission (SEC) has granted accelerated approval to Bitwise’s Bitcoin and Ethereum ETF, marking another significant milestone in the mainstream adoption of cryptocurrency investment products. The approval, announced Thursday, allows investors to gain exposure to both leading cryptocurrencies through a single regulated financial instrument.
Market Impact and Pricing
The announcement prompted positive market movements, with Bitcoin rising 1.13% to $104,612.69 and Ethereum seeing a more substantial 4% increase to $3,269. These price reactions reflect growing investor confidence in regulated crypto investment vehicles.
Product Structure
The Bitwise ETF, which will be listed on the New York Stock Exchange Arca, offers a unique approach by providing exposure to both spot Bitcoin and Ethereum, with holdings weighted according to market capitalization. The foundation for this approval was laid in November when NYSE Arca filed the required 19b-4 form with the SEC.
Broader Industry Context
This approval follows similar authorizations granted to Hashdex and Franklin Templeton just over a month ago. Hashdex’s Crypto Index ETF provides exposure to a diverse cryptocurrency basket, while Franklin Templeton announced plans to launch their product in January 2025.
Regulatory Shift
The timing of these approvals coincides with the new Trump administration’s promised lighter regulatory approach to cryptocurrency markets. This shift in regulatory stance has sparked a wave of new ETF applications from various asset management firms, including proposals for:
- Memecoin ETFs tracking assets like Dogecoin (DOGE)
- Single-asset funds focusing on alternative cryptocurrencies like Solana (SOL)
- Traditional firms like VanEck and ProShares pursuing Litecoin and XRP ETFs
- Grayscale expanding its ETF lineup with applications for spot XRP, Litecoin, and Solana products
Next Steps
While the SEC has granted initial approval, the ETF still requires S-1 registration approval before trading can commence. This review process will ensure the product meets all regulatory standards and includes appropriate investor protection measures.
Industry Implications
The approval represents a significant evolution in cryptocurrency investment products, potentially opening the door for more diverse crypto-based ETFs. It also signals growing institutional acceptance of digital assets and provides traditional investors with a regulated avenue to gain cryptocurrency exposure.
The development comes amid increasing institutional interest in cryptocurrency investment products and suggests a broader shift in how regulatory bodies approach digital asset investment vehicles. As the cryptocurrency market continues to mature, these regulated investment products may play an increasingly important role in bridging the gap between traditional finance and digital assets.
This approval could set precedents for future cryptocurrency ETF applications and may influence how regulators approach the growing number of pending applications for various crypto-related investment products.
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