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Something interesting just landed on the U.S. Securities and Exchange Commission’s (SEC) desk: NYSE Arca, regarded as Wall Street's electronic home for exchange-traded funds (ETFs), wants to list Bitwise's $1.4 billion crypto index fund.
The numbers on the document seem to show where the smart money thinks crypto is headed. Filed Wednesday, the proposed ETF reveals a carefully weighted portfolio that's anything but a crypto free-for-all.
Bitcoin still commands the lion's share at 75.14%, while Ethereum accounts for 16.42%. Together, these two make up over 91% of the fund's holdings.
The remaining slice? It's divided among what Bitwise considers as mid-cap tokens: Solana (4.30%), XRP (1.50%), and Cardano (0.70%).
The rest of what's left from the the pie goes to prominent projects which the crypto-focused investment firm consider as small-cap tokens: Avalanche (AVAX) with 0.60%, Chainlink (LINK) and Bitcoin Cash (BCH) going for 0.40%, and Polkadot (DOT) coupled with Uniswap (UNI) for 0.30%.
Weighing in
The fund isn't just fumbling around for trending tokens though. Each included asset needs to clear some serious hurdles: stable trading volume, proper custody solutions, and zero known security issues.
Perhaps most importantly, the assets need to maintain a price above $0.01 for at least 30 consecutive days—a rule that weeds out the crypto equivalent of penny stocks.
Bitwise isn't taking chances with custody either. It's bringing in Coinbase Custody for the digital assets and The Bank of New York Mellon to handle cash and administrative duties.
Making moves
Looking at the data, there are a few interesting patterns that suggest bigger moves in the ETF space.
First, NYSE Arca's filing includes a crucial 90% surveillance sharing agreement requirement. This same framework helped get spot Bitcoin ETFs and Ethereum ETFs get off the ground earlier this year.
Just last week, Bitwise filed for a Solana ETF as SOL approached a new all-time high. Notably, Bitwise has combined three other Bitcoin and Ethereum futures ETFs into a single momentum-based strategy, a move undertaken as "Uptober" began.
The fund's been around since November 2017, making it one of crypto's oldest index products. Now it wants to graduate to the NYSE Arca, and under new frameworks such as Rule 8.800-E which sets itself specifically for digital assets, it might just have a shot.
If approved, it would let investors grab a slice of the broader crypto market through their regular brokerage accounts.