Bitwise Seeks US SEC Nod for Stablecoin ETF

Key Insights:

• Bitwise Asset Management has filed with the SEC to launch what could be the first U.S. ETF focused on stablecoin and tokenized real-world assets.
• The proposed fund splits investments evenly between stocks in companies involved in these areas and crypto-related exchange-traded products.
• This comes amid a favorable regulatory shift in the US, including the GENIUS Act, which has helped boost stablecoin supply to around $287 billion.

Bitwise Asset Management has filed with the US Securities and Exchange Commission to launch what may become the nation’s first exchange-traded fund focused on stablecoin and tokenized real-world assets.

Meanwhile, the move taps into a sector that’s ballooned amid fresh regulatory tailwinds, with stablecoin supplies now topping $287 billion.

The San Francisco-based firm, which oversees more than $15 billion in assets, submitted its prospectus on Monday for the Bitwise Stablecoin & Tokenization ETF.

Bitwise’s Trailblazing Effort in Stablecoin Sector

The fund, if receives approval, would trade on the NYSE Arca and aim to mirror a custom index crafted by a Bitwise affiliate. Meanwhile, it would focus on companies and products riding the wave of stablecoin growth and asset tokenization.

However, this isn’t a run-of-the-mill crypto play. Bitwise is pitching it as a gateway for traditional investors to dip into blockchain without the wild swings often associated with Bitcoin or Ether.

The stablecoin ETF would split its holdings 50-50 between equities in firms linked to these trends and crypto-focused exchange-traded products. However, it would dodge direct ownership of digital coins or derivatives.

Think of it as a balanced bet. For context, the stock side would hold shares in 20 to 30 companies, sorted into tiers based on how deeply they’re entangled in stablecoins or tokenization.

Meanwhile, top-tier players get up to 15% weighting, mid-tier ones cap at 8%, and lighter involvers are limited to 3%.

On the crypto sleeve, it would include ETPs for blockchain exposure, with a small 5% carve-out for oracle tokens that pipe real-world data into smart contracts.

No single position tops 22.5%, and the whole thing rebalances quarterly.

Capitalizing on Stablecoins and Tokenization Trends

The timing couldn’t be better or riskier. Stablecoins, those dollar-pegged digital tokens that keep crypto trading humming, have surged from about $138 billion at the start of 2024 to $287.63 billion now.

Much of that jump followed President Donald Trump’s signing of the GENIUS Act in July, formally known as the Guiding and Establishing National Innovation for US Stablecoin Act.

The law slaps Bank Secrecy Act rules on issuers and beefs up anti-money laundering checks. The legitimacy it provides gives the crypto market a boost, luring more substantial investments.

Tokenization’s no slouch either. By June, the market for digitized real-world assets—like bonds, real estate, or even art on blockchains—hit $24 billion, up 380% in three years and 260% just this year from a $8.6 billion base.

Meanwhile, Wall Street heavyweights are all in, tokenizing everything from Treasuries to property deeds on public ledgers.

Credit the shifting winds at the New US SEC Chair, Paul Atkins, sworn in back in April after a quick Senate nod, has been cheerleading tokenization as a financial game-changer.

A Closer Look Into The Stablecoin ETF

Under the Trump administration’s pro-crypto vibe, analysts like Bloomberg’s Eric Balchunas are eyeing a possible launch around Thanksgiving, thanks to the streamlined review for ’40 Act funds.

But nothing’s set in stone as no approval yet as of Tuesday.

However, if it clears the hurdles, Bitwise’s Stablecoin ETF would jostle with rivals like Nicholas Wealth Management’s Crypto Income ETF (ticker: BLOX), which has already pulled in over $50 million in assets.

Meanwhile, BLOX gives exposure to Bitcoin and Ether through U.S.-listed ETFs, boasting a one-year return of 58.32% and a three-year return of 30.76%.