The U.S. Securities and Exchange Commission (SEC) has approved the accelerated conversion of the Bitwise ten cryptocurrency index fund into an exchange-traded fund (ETF).
According to the SEC document, the ETF will replicate the Bitwise cryptocurrency index, which includes Bitcoin (78.72%), Ethereum (11.10%), and XRP (4.97%), among other major assets. Other components include Solana, Cardano, SUI, Chainlink, Avalanche, Litecoin, and Polkadot. Coinbase Custody will custody the crypto assets, while BNY Mellon will manage the cash and act as administrator.
To comply with SEC guidelines, at least 85% of the ETF's holdings will consist of crypto assets already approved for exchange-traded products. This includes Bitcoin and Ethereum.
New tokens that have not received approval, such as XRP or Solana, represent 15% of the fund's portfolio. The fund will also be rebalanced monthly to synchronize with the rebalancing of this cryptocurrency index fund.
The framework of the Bitwise cryptocurrency index fund allows for the issuance and redemption of shares in large blocks, called Creation Units. This will allow it to operate identically to other cryptocurrency-based ETFs.
Despite the SEC's approval, the order has already been suspended under Rule 431(e). Therefore, the ETF cannot be launched until the Commission's review is completed. The situation of the Bitwise cryptocurrency index fund is similar to that of the Grayscale Digital Large Cap ETF, which remains under a similar review.
