Regulators Face Pivotal Moment as Bitwise Pushes First Chainlink ETF

Bitwise Asset Management has filed with the U.S. Securities and Exchange Commission (SEC) for the first spot Chainlink (LINK) exchange-traded fund (ETF), signaling growing institutional interest in blockchain-based assets and expanding the crypto product ecosystem. This move reflects a broader industry trend of leveraging tokenized assets to offer traditional investors exposure to the crypto market through familiar financial instruments.

The proposed ETF aims to track the performance of the Chainlink token, a key player in the decentralized oracle market that connects blockchain smart contracts with real-world data sources. Chainlink, developed in 2017, has become a foundational infrastructure for decentralized finance (DeFi), cross-chain applications, and enterprise use cases. Major financial institutions, including UBS, Fidelity International, and Euroclear, have integrated Chainlink into their systems, highlighting its adoption in the traditional financial sector [1]. The token’s market capitalization currently stands at $16.13 billion, with a 24-hour trading volume of $98.76 million, placing it 12th in the global crypto rankings [2].

The filing aligns with the SEC’s recent regulatory developments around crypto ETPs (exchange-traded products). In July 2025, the SEC announced a policy shift allowing in-kind creations and redemptions for crypto ETPs, mirroring traditional ETF structures and reducing operational inefficiencies. This change marks a step toward regulatory acceptance of crypto products while maintaining scrutiny over custody, liquidity, and investor protection [4]. The SEC’s Division of Corporation Finance has also emphasized the need for robust compliance frameworks, particularly for multi-asset or altcoin-based ETPs, as seen in the delayed approvals for Grayscale and Bitwise’s crypto funds [4].

Bitwise’s application comes amid broader regulatory uncertainty and shifting enforcement priorities. The SEC has demonstrated a mixed approach—approving some crypto ETPs while imposing procedural delays or stays on others. For instance, the SEC recently approved and then immediately stayed the listing of Bitwise and Grayscale’s crypto ETFs, citing the need for further review. This pattern indicates internal debates within the agency and a cautious stance toward products involving cryptocurrencies beyond Bitcoin and Ethereum [4].

The filing also occurs against a backdrop of traditional exchanges advocating for stricter regulation of tokenized assets. The World Federation of Exchanges (WFE) has expressed concerns that tokenized equities, such as those offered by platforms like Coinbase and Robinhood, may mimic traditional stocks without providing equivalent investor protections. The WFE has urged regulators like the SEC and the European Securities and Markets Authority (ESMA) to enforce consistent rules for tokenized securities, ensuring transparency and market integrity [3]. These calls reflect broader industry tensions between emerging blockchain-based trading platforms and established financial market infrastructure.

Bitwise’s Chainlink ETF filing is a strategic move that could influence future regulatory decisions and market dynamics. By aligning with the SEC’s evolving stance and leveraging Chainlink’s widespread adoption, Bitwise is positioning itself to capitalize on growing institutional and retail demand for crypto exposure. If approved, the ETF could facilitate easier access to Chainlink for investors unfamiliar with direct crypto trading while reinforcing the token’s role as a foundational infrastructure asset within the blockchain ecosystem. The SEC’s response, however, will play a pivotal role in determining the speed and scale of this innovation’s market adoption.

Source:

[1] Chainlink Price Today (LINK): Live Chart & Data (https://www.gemini.com/prices/chainlink)

[2] Chainlink Price Today: Live LINK-to-USD ... (https://www.mexc.com/price/LINK)

[3] Traditional exchanges call for stricter regulation of ... (https://cryptovalleyjournal.com/focus/legal-and-compliance/traditional-exchanges-call-for-stricter-regulation-of-tokenized-stocks/)

[4] The future of crypto ETPs | United States | Global law firm (https://www.nortonrosefulbright.com/en-us/knowledge/publications/2a919dfb/the-future-of-crypto-etps)