Bitwise Aims to Bridge Wall Street and Blockchain with Hybrid ETF

Bitwise has filed a proposal with the U.S. Securities and Exchange Commission (SEC) for a new Stablecoin & Tokenization ETF, marking the first U.S. product explicitly targeting both stablecoins and tokenized assets. The fund, structured under the Investment Company Act of 1940, aims to provide investors with a diversified exposure to stablecoin infrastructure and related equities. The ETF will be split into two equal parts: one focusing on equities tied to stablecoin and tokenization platforms and the other on crypto-linked exchange-traded products (ETPs). This dual-sleeve structure is designed to mitigate risk while capturing growth in the expanding stablecoin and tokenized real-world asset (RWA) markets.

The equity sleeve will include companies such as stablecoin issuers, blockchain infrastructure providers, payment processors, and exchanges that support stablecoin and tokenization ecosystems. Each stock will be capped at 15% to avoid overconcentration. The crypto sleeve will track regulated ETPs with exposure to blockchain infrastructure, including oracle tokens and assets like Bitcoin and Ethereum, with individual holdings limited to 22.5%. The index provider will determine which assets qualify for inclusion in the crypto sleeve, ensuring alignment with evolving regulatory and market standards.

The proposed ETF is part of a broader surge in institutional and regulatory interest in stablecoins and tokenization. This momentum is driven by the recent enactment of the GENIUS Act in July 2025, which established a federal framework for stablecoins and mandated transparency, reserve requirements, and compliance with anti-money laundering (AML) regulations. Since January 2025, the stablecoin market has grown from approximately $205 billion to nearly $290 billion. Tokenized RWAs, such as bonds and credit instruments, have also experienced significant growth, reaching around $76 billion in market size by September 2025. The Federal Reserve and the SEC have both signaled support for stablecoins and tokenization, with the latter viewing the technology as a financial innovation worth fostering.

The regulatory landscape has also influenced the competitive dynamics among stablecoin issuers. Tether's USDT, the largest stablecoin with a market share of about 62%, faces growing competition from USDC, which has seen robust growth due to its regulatory compliance and institutional adoption. The market share of decentralized stablecoins has also increased slightly, indicating a shift in user preferences. The emergence of yield-bearing stablecoins has further diversified the market, with their combined market cap reaching over $11 billion in May 2025. This innovation reflects the demand for passive income within decentralized finance (DeFi) and the tokenization of traditional assets.

Bitwise is not the only firm seeking to capitalize on the growing demand for stablecoin-related products. Nicholas Wealth’s Crypto Income ETF (BLOX) already offers a similar mixed-strategy approach, combining equities and crypto exposure. However, Bitwise’s dual-sleeve structure is distinctive in its focus on stablecoins and tokenization. The firm currently manages over 20 crypto ETFs and has a total of more than $15 billion in assets under management, positioning it as a key player in the space. Analysts anticipate the ETF could be approved by the SEC in October or November 2025, with a potential launch by Thanksgiving 2025 if approved.

The regulatory clarity provided by the GENIUS Act and the pro-crypto policy environment have created a favorable backdrop for innovation in stablecoin and tokenization products. Bitwise’s filing aligns with broader trends in the market, including increased institutional adoption, the integration of stablecoins into traditional financial systems, and the expansion of tokenized assets. As the SEC continues to process a wave of ETF applications, the approval of Bitwise’s Stablecoin & Tokenization ETF could further accelerate the convergence of traditional finance and blockchain-based assets. This development could also encourage more firms to explore hybrid investment products that leverage both conventional equities and crypto-linked exposures.