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Bitwise Asset Management Seeks Approval for Chainlink ETF
Bitwise Asset Management has taken a significant step in the cryptocurrency investment arena by submitting a preliminary S-1 application to the US Securities and Exchange Commission (SEC) for the Bitwise Chainlink exchange-traded fund (ETF). This marks the first proposed US-listed fund aimed at tracking the price of LINK, the native token of the Chainlink oracle network.
Key Features of the Proposed ETF
The ETF’s primary objective is to reflect LINK’s market value, with Coinbase Custody Trust Company designated as the custodian and Coinbase, Inc. serving as the execution agent. While the fund is set to be listed on a US national exchange, the specific platform has yet to be revealed.
The structure is designed to incorporate traditional ETF creation and redemption mechanisms, allowing for both in-kind and cash transactions through a “Trust-Directed Trade” process managed by the execution agent. This innovative approach aims to provide investors with a regulated and transparent means of accessing LINK’s performance, alongside institutional-grade custody and settlement services.
Chainlink plays a pivotal role in decentralized finance (DeFi) by functioning as a decentralised oracle network that supplies off-chain data—such as market feeds—to smart contracts. The LINK token not only incentivises node operators but also secures data delivery and supports governance in the network’s proof-of-stake system.
Competition and Market Landscape
In tandem with Bitwise’s initiative, Tuttle Capital has submitted filings for a suite of ten leveraged crypto ETFs, including one specifically for Chainlink. These products are designed to deliver double the daily return of the underlying asset by using swaps, options, and direct holdings.
While the proposed Bitwise ETF would be the first of its kind in the US, similar investment products already exist in Europe. Companies such as 21Shares, VanEck, and Global X have been offering physically backed Chainlink exchange-traded products (ETPs) that trade on regulated markets, providing European investors with access to LINK for some time. This situation underscores a notable delay in the US market’s ability to approve non-Bitcoin and non-Ethereum crypto ETFs.
If successful, Bitwise’s ETF could significantly broaden the range of regulated cryptocurrency investment options available in the US, joining recently launched spot Bitcoin and Ethereum ETFs. This would diversify institutional access to the growing digital asset landscape.
Conclusion
As the cryptocurrency market continues to evolve, Bitwise’s filing represents a crucial development in enhancing investor access to alternative digital assets like Chainlink. With the SEC’s approval, the ETF could pave the way for broader acceptance and integration of cryptocurrency within traditional investment frameworks, ultimately benefitting investors seeking diversified exposure.
