Bitwise Closes Ranks With $200 Million Seed Fund

4:16 am
December 31, 2023
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**Bitwise’s $200 Million Seed Fund Marks a Major Move in the Bitcoin ETF Race**

Bitwise, a prominent asset manager, is making significant strides in the race to launch a Spot Bitcoin ETF, as it secures a potential $200 million in seed funds. This places Bitwise in a strong position to potentially outpace BlackRock, the world’s largest asset manager, in terms of seed funds for their respective ETFs.

Bitwise’s latest amendment to its S-1 filing with the Securities and Exchange Commission (SEC) revealed that the asset manager has garnered interest from an investor to seed its ETF with $200 million upon launch. Bloomberg analyst Eric Balchunas highlighted the significance of this move, emphasizing that it surpasses BlackRock’s initial seed fund of $10 million.

The substantial amount in seed funds for Bitwise’s Bitcoin ETF is expected to provide a significant advantage in meeting client demands, especially in the early stages of the race. This move is aligned with Bitwise’s intention to lead from the forefront, evident from its Bitcoin ETF commercial, which has garnered substantial interest even before the launch.

While Bitwise has not disclosed its authorized participant (AP), responsible for creating and redeeming ETF shares, this development underscores the fierce competition among Spot Bitcoin ETF issuers, as evidenced by notable inclusions in their latest S-1 filings.

In a similar vein, Fidelity, with its relatively low fees, and Invesco, waiving fees for the first six months and the first $5 billion in assets, are adopting enticing strategies to attract investors to their funds.

As the Spot Bitcoin ETF landscape becomes increasingly competitive, analysts anticipate a continued “fee war” among issuers to outdo each other.

**FAQ**

**Q: What is a Spot Bitcoin ETF?**
A: A Spot Bitcoin ETF is an exchange-traded fund that allows investors to gain exposure to Bitcoin at the current market price.

**Q: What is a seed fund in the context of ETFs?**
A: A seed fund is the initial capital provided to launch an ETF, helping to create and redeem ETF shares.

**Q: What are S-1 filings with the Securities and Exchange Commission (SEC)?**
A: S-1 filings are statements that companies must submit to the SEC before they can go public. In the context of ETFs, these filings provide important details about the fund and its offerings.

**Q: What is the role of an authorized participant (AP) in an ETF?**
A: An authorized participant is responsible for creating and redeeming ETF shares. They act as intermediaries between the ETF investor and issuer.

**Q: What is the significance of the fee strategies adopted by ETF issuers?**
A: Lower fees can make ETFs more attractive to investors, potentially leading to increased fund flows and market share for the issuers.


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