Bitwise launches a ‘Crypto ETF’ With Bitcoin Exposure – Should You Buy?

Bitwise has launched an ETF to give exposure to digital assets. The ETF will invest in public companies that deal in blockchain and the crypto sector.

Bitwise Asset Management is one of the first crypto firms in the US to launch an exchange-traded fund (ETF). The US Securities and Exchange Commission (SEC) has been reluctant to approve ETFs that make direct investments in crypto.

The new ETF fromBitwise will be known as the BITQ and will invest in the shares of public limited companies participating in Bitcoin and the entire crypto sector.

Announcing today's launch of the Bitwise Crypto Industry Innovators ETF (NYSE: $BITQ)! $BITQ holds public companies backing bitcoin and crypto innovation. Available in brokerages now! (BITQ ETF Risk Disclosure: https://t.co/k76Eg2q5GM) pic.twitter.com/jUZHxF4UFz

— Bitwise (@BitwiseInvest) May 12, 2021

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The BITQ fund will be based on the Crypto Innovators 30 Index. The index is used to assess the performance of leading firms involved in the crypto sector. The firms included should also have at least $100 million in liquid crypto assets listed on their balance sheet.

In an announcement, Bitwise stated that the Crypto Innovators ETF would mainly involve firms that derive a minimum of 75% of their revenues from direct investments in crypto markets or have 75% of their net assets invested directly in liquid crypto assets.

According to Hunter Horsley, the Chief Executive for Bitwise, the lack of regulated crypto products in the US had excluded many investors who want to gain exposure in Bitcoin and tap into the massive returns of the sector.

“We’ve heard time and again from clients that the primary challenge has been finding a way to access the incredibly complex and fast-moving crypto space. With BITQ, our aim is to make crypto investment opportunities available through traditional investing platforms and a familiar, liquid, and cost-effective ETF.” Horsley said.

Not the first of its kind

Whilst the SEC continues to  baulk at approving a crypto ETF, the BITQ will not be the first crypto ETF to give investors exposure to cryptocurrencies. The Amplify Transformational Data Sharing ETF (BLOK) is a data-sharing focused ETF that has been highly ranked among the 50 best-performing ETFs this year. BLOK ETF has made a year-to-date gain of 36.4%.

The BLOK ETF has a large portfolio, including leading companies that have directly invested in the crypto market. Around 41% of the firm’s total assets under management include Galaxy Digital Holdings (GLXY), Marathon Digital Holdings (MARA), MicroStrategy (MSTR), and Galaxy.

BLOK holds around 8% of capital investments in MSTR, making it the single largest holder. It is also the biggest holder of MARA shares.

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