Bitwise Secures SEC Approval for Combined Bitcoin and Ethereum ETF

Bitwise Asset Management has secured initial approval from the U.S. Securities and Exchange Commission (SEC) for its combined Bitcoin and Ethereum exchange-traded fund (ETF). The regulator approved the fund's form 19b-4 on Jan. 30, 2025, marking a significant milestone in the crypto industry's quest for broader institutional acceptance.

The Bitwise Bitcoin and Ethereum ETF will provide investors with exposure to the spot prices of both cryptocurrencies in a single fund, weighted according to their relative market capitalizations. As of the date of filing, the ETF was allocated 83% to Bitcoin (BTC) and 17% to Ethereum (ETH). The fund will calculate the market capitalization of the two crypto assets by multiplying the pricing benchmarks by their current circulating supplies.



The approval comes less than two weeks after a new crypto-friendly acting chair was appointed to lead the SEC. Bitwise submitted paperwork for the joint ETF to regulators in November 2024, following Donald Trump's election win. The fund will be managed by Bitwise Investment Advisers, with custody provided by Coinbase and cash custodian, administrator, and transfer agent services provided by Bank of New York Mellon.

This approval is the third joint BTC and ETH spot ETF to be approved by the SEC, following similar ETFs from Hashdex and Franklin Templeton on Dec. 19, 2024. Bitwise is also planning to launch ETFs for memecoins, with a filing for a spot Dogecoin (DOGE) product submitted on Jan. 28, 2025.

The SEC's accelerated approval process for Bitwise's ETF signals a shift in its stance towards crypto-related financial products. The regulator approved the fund's 19b-4 application in just 45 days, significantly faster than the usual 240-day timeline. This swift approval indicates that the SEC is becoming more open to crypto investment products, potentially signaling a more favorable regulatory environment for the industry.

The surge in inflows for spot Bitcoin and Ethereum ETFs following the SEC's approval of Bitwise's combined fund can be attributed to several factors. These include regulatory tailwinds, institutional interest, market capitalization-weighted allocation, and the accelerated approval process. As the relative market capitalizations of BTC and ETH evolve over time, the risk-return profile of the ETF may change, with potential impacts on both returns and volatility.

In conclusion, Bitwise's SEC approval for its combined Bitcoin and Ethereum ETF is a significant development in the crypto industry's quest for broader institutional acceptance. The accelerated approval process signals a shift in the SEC's stance towards crypto-related financial products, potentially leading to a faster approval process and increased likelihood of approval for other filings before the Commission. The surge in inflows for spot Bitcoin and Ethereum ETFs following the approval reflects growing institutional interest in the crypto market, with potential implications for the fund's risk-return profile as the relative market capitalizations of BTC and ETH evolve over time.