Bitwise Working on ETP Providing Exposure to Ethereum L2 Applications

Cryptocurrency asset management firm Bitwise is contemplating the launch of an exchange-traded product (ETP) that would encompass Ethereum’s diverse layer 2 networks and applications. 

This potential move was hinted at by the firm’s Chief Investment Officer, Matt Hougan, in a recent interview with Forbes.

As reported earlier by TheCoinRise, Bitwise made a significant move in the crypto market by filing with the United States Securities and Exchange Commission (SEC) to introduce a spot Ether exchange-traded fund (ETF). 

Bitwise Expresses Lack of Such Product

Hougan expressed a blend of anticipation and remorse regarding Bitwise’s lack of such a product, acknowledging the potential value it could bring to investors. 

He emphasized his confidence in the evolving nature of the Ethereum ecosystem but admitted uncertainty regarding which layer 2 solutions and applications will emerge as dominant forces in the future.

“The best way to approach that would be to own them all, which would be a great product for what it’s worth,” Hougan remarked.

Game Changer: Bitwise CIO

Highlighting the significance of Ethereum’s Denou upgrade, the Bitwise executive asserted that the market severely underestimates its impact, dubbing it a “complete game changer.” 

Despite this, the Bitwise executive expressed concerns about the readiness of the market for a spot Ethereum exchange-traded fund (ETF), urging regulatory authorities to delay approval until December.

Bitwise initiated the process for a spot Ether ETF by filing its S-1 and 19-b4 forms with the Securities and Exchange Commission (SEC) on March 28. However, Bitwise is just one of several firms, including BlackRock, VanEck, and Fidelity, vying for SEC approval for a spot Ether ETF.

Approval of Spot ETH ETFs

May was initially anticipated to be a pivotal period for potential mass approvals of spot Ether ETFs. Nonetheless, some analysts have revised their outlook due to perceived reluctance from the SEC to engage with applicants in recent months.

Contrary to pessimistic projections, Craig Salm, Grayscale’s chief legal officer, argued that the challenges faced by spot Ether ETFs have largely been resolved through the precedent set by spot Bitcoin ETFs.

Bitwise’s foray into the cryptocurrency ETF market has been notable, with its Bitwise Bitcoin ETF (BITB) garnering significant inflows. As of March 28, BITB has amassed over $1.6 billion in flows, positioning itself among the top issuers alongside industry giants like BlackRock and Fidelity.