The Bitwise Ethereum ETF (ETHW) Set To Launch on the NYSE; Firm Announces Donation to Ethereum Developers, Will Publish Blockchain Addresses To Showcase Transparency

Rhea-AI Summary

Bitwise Asset Management announced the launch of the Bitwise Ethereum ETF (ETHW) on the NYSE, set to begin trading on July 23. This marks the debut of spot Ethereum funds in the U.S. Key features include:

- Low management fee of 0.20%, waived for the first six months on the first $500 million in assets
- Direct investment in ether (ETH)
- 10% of fund profits to be donated to Ethereum developers
- Public disclosure of wallet addresses for transparency

The launch follows Bitwise's successful Bitcoin ETF (BITB), which reached $2.7 billion in AUM. ETHW aims to provide investors exposure to Ethereum's potential in areas like DeFi, NFTs, and stablecoins.

Positive

• Launch of the first spot Ethereum ETF in the U.S., potentially attracting significant new investment
• Low management fee of 0.20%, with fee waived for first 6 months on first $500 million in assets
• 10% of fund profits to be donated to Ethereum developers, supporting the ecosystem
• Public disclosure of wallet addresses, enhancing transparency
• Follows successful launch of Bitcoin ETF (BITB) which reached $2.7 billion in AUM

Negative

• High-risk investment with potential for significant volatility and loss
• Not registered under the Investment Company Act of 1940, lacking certain regulatory protections
• Continuous reduction in ether represented by shares due to management fees and expenses
• Potential liquidity risks in the ether market
• Regulatory uncertainties surrounding cryptocurrency investments

ETHW features a management fee of 0.20%, and Bitwise will donate 10% of fund profits to Ethereum developers.

SAN FRANCISCO--(BUSINESS WIRE)-- Crypto specialist Bitwise Asset Management announced today that the Bitwise Ethereum ETF (ticker: ETHW) is scheduled to begin trading on the New York Stock Exchange on July 23, marking the historic debut of spot Ethereum funds in the U.S. The fund has a low-cost management fee of 0.20%, with the fee set to 0% for the first six months on the first $500 million in assets.¹ ETHW will invest directly in ether (ETH), the world’s second-largest crypto asset by market capitalization² and the driving force behind the popular Ethereum blockchain.

ETHW is set to begin trading just over six months after the launch of the Bitwise Bitcoin ETF (BITB), which became one of the fastest-growing ETPs in history on its way to $2.7 billion in assets under management today. ETHW will be Bitwise’s eighth publicly traded crypto fund and the latest addition to an extensive suite of 20 crypto products.

Investors should note that, unlike many other exchange-traded products, ETHW and BITB are not registered under the Investment Company Act of 1940 and are not subject to its regulations.

With the approval of spot Ethereum ETPs, investors will have the opportunity to diversify their crypto exposure through an asset that is fueling some of the most influential use cases in crypto today: stablecoins, non-fungible tokens (NFTs), decentralized finance (DeFi), and tokenization.³

“Moves Us to the Second Inning”

“Bitcoin ETPs started a new ballgame for crypto; the launch of spot ether ETPs moves us to the second inning,” said Bitwise CIO Matt Hougan. “Making bitcoin available in an exchange-traded format brought more than $17 billion of new investment into crypto in a matter of months. We think this launch will extend that run with billions more and drive ETH to new all-time highs in 2024.”

Hougan added that the availability of ether ETPs could prompt many investment professionals and institutions to diversify their crypto exposure.

“Bitcoin and ETH have different strengths, different use cases, and different fundamental drivers, so investors are apt to have them assume different roles in a portfolio. Whereas bitcoin is a monetary asset with a role similar to alternatives, ETH plays more like a high-growth tech stock. By powering crypto’s ‘killer apps’ like DeFi, NFTs, and stablecoins, ETH provides exposure to the most disruptive capabilities of blockchains. We’re excited to offer ETHW as a way for investors to gain greater access to crypto’s potential.”

Ethereum has become the foundation for some of the most popular applications of crypto today. In recent years, many of the world’s top global brands, including Nike, Starbucks, Tiffany & Co., and JPMorgan, have built projects on Ethereum.⁴ The blockchain has also become the primary platform for stablecoins and DeFi, whose markets today are around $150 billion each.⁵ Growing awareness of Ethereum’s potential has driven ETH, the asset that powers it, to a market cap of more than $400 billion—second only to bitcoin among digital assets.⁶

Donating 10% of Profits to Ethereum Open-Source Developers; Public Disclosure of Wallet Addresses

In conjunction with the fund’s launch, Bitwise announced that 10% of all ETHW profits will be donated to two organizations: Protocol Guild, a grassroots funding organization that supports more than 170 core contributors to Ethereum Layer 1 protocol research and development, and PBS Foundation, a non-profit that funds open-source Ethereum block relays and surrounding research. “Ethereum, as an open-source technology, is maintained by a dedicated community of open-source developers,” said Hong Kim, Bitwise’s Chief Technology Officer. “Every investor in ETHW wants Ethereum to continue to advance, and this donation program contributes to that goal.”

In addition, in an effort to foster transparency Bitwise will publish the Ethereum addresses of all ETHW holdings, giving any investor the ability to verify the fund’s holdings and flows directly on the blockchain.

Watershed Moment for Access

“Bitwise was founded in 2017 to help investors participate in crypto’s groundbreaking potential,” said Bitwise CEO Hunter Horsley. “This year’s launch of Bitcoin and Ethereum ETPs is a monumental step forward for investors looking to access the space. Now with ETHW, millions of Americans can gain exposure to Ethereum through their financial advisor or the traditional brokerage and retirement accounts they rely on for their investing activities.”

Fund Details

The fund, which will trade on the NYSE, leverages experienced service providers, including Coinbase Custody Trust Company as digital asset custodian, Bank of New York Mellon as administrator, and KPMG as auditor. It is the twentieth Bitwise product in a suite that features seven other publicly traded funds—including the world’s largest crypto index fund—along with separately managed accounts, private placement vehicles, and multi-strategy solutions.

With its nationwide distribution team and industry-leading research, Bitwise focuses on helping investors understand and access the opportunities in crypto. In addition to its expansive product suite, Bitwise offers a wide range of insights, including the Weekly CIO Memo, topical white papers, interactive tools, and other key resources—including an Ethereum library—available in the Bitwise Expert Portal.

ETHW and BITB are not suitable for all investors. An investment in ETHW or BITB is subject to a high degree of risk, has the potential for significant volatility, and could result in significant or complete loss of investment.

To view the Fund's prospectus, click here.
To learn more about ETHW, visit ethwetf.com.

Risks and Important Information

This material must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing. To obtain a current prospectus visit ETHWetf.com/prospectus.

The Bitwise Ethereum ETF ("ETHW" or the "Fund") is not suitable for all investors. An investment in ETHW is subject to a high degree of risk, has the potential for significant volatility, and could result in significant or complete loss of investment.

ETHW is not an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and is not afforded its protections. 


Shares of ETPs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. The NAV may not always correspond to the market price of ether and, as a result, Creation Units may be created or redeemed at a value that is different from the market price of the Shares. Authorized Participants’ buying and selling activity associated with the creation and redemption of Creation Units may adversely affect an investment in the Shares.


ETHW will not participate in the proof-of-stake validation mechanism to earn additional ether or seek other means of generating income from its ether holdings.

The amount of ether represented by a Share will continue to be reduced during the life of the Fund due to the transfer of the Fund’s ether to pay for the Sponsor’s management fee, and to pay for litigation expenses or other extraordinary expenses. This dynamic will occur irrespective of whether the trading price of the Shares rises or falls in response to changes in the price of ether.

There is no guarantee or assurance that the Fund’s methodology will result in the Fund achieving positive investment returns or outperforming other investment products.

Investors may choose to use the Fund as a means of investing indirectly in ether. An investment in the Fund is not a direct investment in ether. Because the value of the Shares is correlated with the value of the ether held by the Fund, it is important to understand the investment attributes of, and the market for, ether.

Ether Risk. There are significant risks and hazards inherent in the ether market that may cause the price of ether to fluctuate widely. The Fund’s ether may be subject to loss, damage, theft or restriction on access. Investors considering a purchase of Shares should carefully consider how much of their total assets should be exposed to the ether market, and should fully understand, be willing to assume, and have the financial resources necessary to withstand the risks involved in the Fund’s investment strategy.

Liquidity Risk. The market for ether is still developing and may be subject to periods of illiquidity. During such times it may be difficult or impossible to buy or sell a position at the desired price. Possible illiquid markets may exacerbate losses or increase the variability between the Fund’s NAV and its market price. The lack of active trading markets for the Shares may result in losses on investors’ investments at the time of disposition of Shares.

Regulatory Risk. Future and current regulations by a U.S. or foreign government or quasi-governmental agency could have an adverse effect on an investment in the Fund.

Blockchain Technology Risk. Certain of the Fund’s investments may be subject to the risks associated with investing in blockchain technology. The risks associated with blockchain technology may not fully emerge until the technology is widely used. Blockchain systems could be vulnerable to fraud, particularly if a significant minority of participants colluded to defraud the rest. Because blockchain technology systems may operate across many national boundaries and regulatory jurisdictions, it is possible that blockchain technology may be subject to widespread and inconsistent regulation.

Nondiversification Risk. The Fund is nondiversified and will hold a single issue. As a result, a decline in the market value of a particular issue held by the Fund may affect the Fund’s value more than if it invested in a larger number of issuers.

Recency Risk. The Fund is recently organized, giving prospective investors a limited track record on which to base their investment decision. If the Fund is not profitable, the Fund may terminate and liquidate at a time that is disadvantageous to Shareholders.

Bitwise Investment Advisers, LLC serves as the sponsor of the Fund. Foreside Fund Services, LLC serves as the Marketing Agent for ETHW, and is not affiliated with Bitwise Investment Advisers, LLC, Bitwise, or any of its affiliates.

BITB Risks and Important Information

This material must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing. To obtain a current prospectus visit BITBetf.com/prospectus.

The Bitwise Bitcoin ETF ("BITB" or the "Fund") is not suitable for all investors. An investment in BITB is subject to a high degree of risk, has the potential for significant volatility, and could result in significant or complete loss of investment.

BITB is not an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and is not afforded its protections. 


Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. The NAV may not always correspond to the market price of bitcoin and, as a result, Creation Units may be created or redeemed at a value that is different from the market price of the Shares. Authorized Participants’ buying and selling activity associated with the creation and redemption of Creation Units may adversely affect an investment in the Shares.

The amount of bitcoin represented by a Share will continue to be reduced during the life of the Fund due to the transfer of the Fund’s bitcoin to pay for the Sponsor’s management fee, and to pay for litigation expenses or other extraordinary expenses. This dynamic will occur irrespective of whether the trading price of the Shares rises or falls in response to changes in the price of bitcoin.

There is no guarantee or assurance that the Fund’s methodology will result in the Fund achieving positive investment returns or outperforming other investment products.

Investors may choose to use the Fund as a means of investing indirectly in bitcoin. Because the value of the Shares is correlated with the value of the bitcoin held by the Fund, it is important to understand the investment attributes of, and the market for, bitcoin.

Bitcoin Risk. There are significant risks and hazards inherent in the bitcoin market that may cause the price of bitcoin to fluctuate widely. The Fund’s bitcoin may be subject to loss, damage, theft or restriction on access. Investors considering a purchase of Shares should carefully consider how much of their total assets should be exposed to the bitcoin market, and should fully understand, be willing to assume, and have the financial resources necessary to withstand the risks involved in the Fund’s investment strategy.

Liquidity Risk. The market for bitcoin is still developing and may be subject to periods of illiquidity. During such times it may be difficult or impossible to buy or sell a position at the desired price. Possible illiquid markets may exacerbate losses or increase the variability between the Fund’s NAV and its market price. The lack of active trading markets for the Shares may result in losses on investors’ investments at the time of disposition of Shares.

Regulatory Risk. Future and current regulations by a U.S. or foreign government or quasi-governmental agency could have an adverse effect on an investment in the Fund.

Blockchain Technology Risk. Certain of the Fund’s investments may be subject to the risks associated with investing in blockchain technology. The risks associated with blockchain technology may not fully emerge until the technology is widely used. Blockchain systems could be vulnerable to fraud, particularly if a significant minority of participants colluded to defraud the rest. Because blockchain technology systems may operate across many national boundaries and regulatory jurisdictions, it is possible that blockchain technology may be subject to widespread and inconsistent regulation.

Nondiversification Risk. The Fund is nondiversified and may hold a smaller number of portfolio securities than many other products. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers.

Recency Risk. The Fund is recently organized, giving prospective investors a limited track record on which to base their investment decision. If the Fund is not profitable, the Fund may terminate and liquidate at a time that is disadvantageous to Shareholders.

Bitwise Investment Advisers, LLC serves as the sponsor of the Fund. Foreside Fund Services, LLC serves as the Marketing Agent for BITB, and is not affiliated with Bitwise Investment Advisers, LLC, Bitwise, or any of its affiliates.

___________

¹ Until January 22, 2025, the Sponsor has waived its fee on the first $500 million in assets. Other fees such as brokerage and commission expenses may apply.
² Source: CoinMarketCap as of June 30, 2024.
³ Diversification does not guarantee a profit or protect against loss.
⁴ ETHW does not invest in Nike, Starbucks, Tiffany & Co., or JPMorgan.
⁵ Source: The Block, DeFi Llama, and Coin Metrics as of June 30, 2024. DeFi market size refers to total value locked (TVL) on decentralized finance applications.
⁶ Source: CoinMarketMap as of June 30, 2024.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240722523467/en/

Media Contact

Frank Taylor/Stephanie Dressler

Dukas Linden Public Relations

Bitwise@DLPR.com

Source: Bitwise Asset Management

FAQ

When will the Bitwise Ethereum ETF (ETHW) begin trading on the NYSE?

The Bitwise Ethereum ETF (ETHW) is scheduled to begin trading on the New York Stock Exchange on July 23.

What is the management fee for the Bitwise Ethereum ETF (ETHW)?

The Bitwise Ethereum ETF (ETHW) has a management fee of 0.20%, with the fee waived for the first six months on the first $500 million in assets.

How much of the Bitwise Ethereum ETF (ETHW) profits will be donated to Ethereum developers?

Bitwise announced that 10% of all ETHW profits will be donated to organizations supporting Ethereum developers and research.

Will the Bitwise Ethereum ETF (ETHW) disclose its wallet addresses?

Yes, Bitwise will publish the Ethereum addresses of all ETHW holdings to foster transparency and allow investors to verify the fund's holdings directly on the blockchain.

How does the Bitwise Ethereum ETF (ETHW) differ from traditional ETFs?

Unlike many other exchange-traded products, ETHW is not registered under the Investment Company Act of 1940 and is not subject to its regulations, potentially carrying different risks.