Bitwise Asset Management has filed for a Chainlink ETF license, expanding the U.S. cryptocurrency ETF market beyond Bitcoin and Ethereum.
This fund will track the spot price of LINK tokens, aiming to diversify investment choices in the cryptocurrency ETF space in the U.S.
MAIN CONTENT
Bitwise is seeking a license for an ETF that tracks the spot price of Chainlink (LINK) tokens.
The ETF focuses on holding LINK, not related to staking, using Coinbase as the custodian and transaction executor.
The SEC's decision on this application will shape the future of altcoin ETFs in the U.S.
What does Bitwise's Chainlink ETF registration filing include?
The ETF is expected to directly hold LINK tokens, with Coinbase Custody Trust Company as the custodian and Coinbase Prime responsible for order execution. The fund is linked to the CME CF Chainlink-Dollar reference index, allowing both creation and redemption in cash or underlying assets.
Notably, the filing does not mention staking activities, although the SEC has previously confirmed that staking on a proof-of-stake network is not a securities transaction. Bitwise has chosen a straightforward approach, focusing entirely on the market spot price of LINK.
Why choose Chainlink for the ETF?
Chainlink is not an ordinary altcoin. Launched in 2019, this decentralized oracle network is an essential solution in DeFi, asset tokenization, gaming, NFTs, and multi-chain projects. Chainlink's technology provides reliable data for smart contracts, used by major organizations, including central banks.
The price of LINK is currently around $23.42, ranking 13th in cryptocurrency market capitalization but down over 50% from its peak in 2021 above $52.
How will the SEC evaluate this filing?
Although the structure of the ETF is similar to the Bitcoin and Ethereum funds that have been approved, the SEC's perspective on altcoin ETFs still has many constraints. Bitwise's decision to maintain a simple design, with 100% of assets being LINK, a single custodian, and no staking, may be aimed at facilitating the evaluation process.
However, approval is still uncertain, and this could be a pivotal decision paving the way for other altcoin ETFs.
What is the global demand for Chainlink ETFs?
In Europe, there are Chainlink-related products issued by companies like 21Shares and VanEck. The demand for Chainlink is clearly demonstrated, but the U.S. market is much larger.
This year, global cryptocurrency ETFs have attracted nearly $30 billion in investment, with total assets under management exceeding $150 billion. A Chainlink ETF listed in the U.S. could attract new institutional capital for this token.
What is the broader significance of expanding altcoin ETFs in the U.S.?
Bitwise's filing information appears against the backdrop of the ongoing diversification of cryptocurrency ETFs. Recently, Grayscale has taken steps to convert Avalanche Trust into a spot AVAX ETF, while Bitwise has additional applications for XRP, Solana, Dogecoin, and Aptos.
The cryptocurrency ETF race is gradually moving beyond Bitcoin and Ethereum, creating notable interest in the market.
“The filing for the Chainlink ETF is a bold step to expand investment options for institutional investors in the U.S., making the cryptocurrency ETF market more diverse.”
– Bitwise Asset Management spokesperson, 2024
Frequently Asked Questions
What will Bitwise's Chainlink ETF look like when approved?
The fund will directly hold LINK tokens, track the spot price, and operate simply with Coinbase as the custodian and transaction executor.
Why doesn't Bitwise include staking in the ETF product?
They avoid staking to maintain a clear fund structure, with a product solely focused on tracking the market spot price of LINK.
How does the SEC influence new altcoin ETFs?
The SEC's decision will guide the approval of similar altcoin ETFs in the future.
What makes Chainlink particularly attractive to investors?
Chainlink's decentralized oracle technology is crucial in DeFi and major applications, with a high level of practical application.
What is the current size of the cryptocurrency ETF market?
Globally, cryptocurrency ETFs attracted nearly $30 billion in investments in 2024, with total assets under management exceeding $150 billion.
Source: https://tintucbitcoin.com/bitwise-nop-ho-so-etf-spot-chainlink/
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