Bitwise Index Services is the index sponsor; Exchange Traded Concepts LLC is the ETF’s advisor; and the Bank of New York Mellon, the custodian and transfer agent.
The Bitwise Crypto Innovators ETF is Bitwise’s first ETF to come to market. Applications for two other crypto-related ETFs, including a Bitcoin ETF, didn’t make it to market. Bitwise, however, currently sponsors five other crypto-related funds — Bitwise 10 Crypto Index Fund, Bitwise DeFi Crypto Index Fund, Bitwise Bitcoin Fund, Bitwise Ethereum Fund and Bitwise 10 Index Offshore Fund. Most are private placements available only to accredited investors but the Bitwise 10 Crypto Index Fund (BITW) is available to all investors on the over-the-counter market, and Bitwise has similar plans for its Bitcoin fund.
The new ETF will compete with two other crypto ETFs on the market: the Amplify Transformational Data Sharing ETF (BLOK), which has an expense ratio of 0.71%, and the VanEck Vectors Digital Transformational ETF (DAPP) whose fees are 0.65%.
Though more expensive, BITQ “rebalances to 85% ‘pure play’ monthly,” says Dave Nadig, director of research and chief investment officer at ETFTrends.com. “You can’t call your fund something unless your investments are at least 80% that something, so that means they get to call this a ‘crypto’ fund.”
Bitcoin-related investments are in high demand, says Todd Rosenbluth, head of ETF and mutual fund research at CFRA, noting the popularity of BLOK, which has benefited from the rising value of blockchain securities. That could bode well for BITQ.