Bitwise Moves to Launch Chainlink-Backed ETF

Bitwise Asset Management has taken a significant step by submitting a preliminary proposal to the U.S. Securities and Exchange Commission (SEC) for an Exchange-Traded Fund (ETF) centered on the altcoin Chainlink (LINK). This ambitious ETF aims to reflect the LINK token’s spot price, presenting investors with a regulated avenue in the burgeoning crypto-focused product sphere. As digital asset interest expands beyond mainstream cryptocurrencies like Bitcoin and Ethereum, Bitwise seeks to captivate that demand by offering innovative blockchain-based financial solutions.

Will Bitwise’s New ETF Meet Investor Expectations?

In their detailed submission, Bitwise laid out a robust plan highlighting the fund’s objective to mirror the market price of LINK tokens accurately. To facilitate this, Coinbase Custody Trust Company is slated to secure assets, while Coinbase will function as the primary broker. Although the specific exchange for listing remains unnamed, the ETF promises efficient market operations utilizing established creation and redemption strategies with cash or asset transactions. This method, described as “Trust-Directed Trade,” will be managed by the principal broker.

Why Is Staking Absent in the Chainlink ETF Strategy?

A distinct feature of the proposed ETF is the conspicuous absence of staking LINK tokens. Despite the SEC’s recent affirmation on the legality of staking under federal securities laws, Bitwise opts to solely focus on the spot price model. This decision steers clear of staking rewards, instead offering investors pure market exposure to LINK’s intrinsic value.

Bitwise’s initiative marks a notable evolution in the realm of crypto-based ETFs, unveiling pathways beyond Bitcoin and Ethereum through single-asset innovations. Alongside Bitwise, Grayscale has entered the race by proposing to turn its Avalanche Trust into a spot ETF. Such developments underscore a collective rush among financial firms to diversify Wall Street’s crypto investment offerings.

Matt Hougan, Bitwise’s Chief Investment Officer, remarked, “Chainlink is among the most robust investment choices, poised for greater significance with tokenization’s rise.”

CryptoAppsy data reveals that as of the report’s drafting, LINK coins traded at $23.24, a decline of 4.93% within 24 hours, signaling market volatility yet potential for strategic asset allocation.

These recent efforts by Bitwise and others highlight the dynamic nature of the crypto space, providing informed conclusions for market participants:

– Introduction of Chainlink-focused ETF represents growth in blockchain assets.
– Absence of staking underscores commitment to traditional market exposure.
– Alliance with established firms like Coinbase signals robust operational frameworks.

Bitwise’s proposal for a Chainlink-centric ETF represents a pivotal shift toward diversified cryptocurrency investments. By strategically navigating regulatory nuances and leveraging industry partnerships, Bitwise aspires to lead in offering innovative investment products that could redefine the crypto landscape.