The US Securities and Exchange Commission (SEC) has approved part of an application for a novel exchange-traded fund (ETF) that tracks both bitcoin and ethereum.
The Bitwise bitcoin and ethereum ETF aims to provide investors with balanced exposure to the two digital assets, weighted according to their market capitalization. Based on the current market value, bitcoin would make up around 83% of the ETF, while ethereum would account for 17%. The structure of the fund will resemble existing ETFs that hold either bitcoin or ethereum directly.
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Green light for the fund
The SEC approved a document known as Form 19b-4 as part of the application process. This represents the first step in the overall procedure to enable trading of the product. The Bitwise fund still requires approval for its pending registration application, known as the S-1. Both steps are necessary to initiate trading. Bitwise filed its application for the combined bitcoin and ethereum ETF shortly after Trump’s election victory last November, speculating on regulatory changes that are now materializing.
Through an executive order, Trump established a task force focused on digital assets. Led by his "crypto czar" David Sacks, the group will develop new legislative proposals, restructure regulatory agencies, and evaluate a strategic crypto reserve. The first effects of this decision are already becoming evident.
SEC bombarded with ETF applications
Since Gensler’s resignation on January 20, numerous new crypto ETF applications have flooded into SEC offices. A large portion of these pending products focus on alternative crypto funds that complement bitcoin and ethereum. In particular, Solana, XRP, and Litecoin, along with memecoins such as Dogecoin and Bonk, are awaiting ETF approvals.
It remains unclear how the SEC will respond to these applications. According to Bloomberg analyst Nathan Dean, issuers are testing the agency's limits with exotic applications like memecoin ETFs. However, serious products, such as funds for Solana and XRP, could be approved soon. A leaked test page from the Chicago Mercantile Exchange (CME) hinted that the world’s largest futures exchange may soon offer futures for both cryptocurrencies. In the past, such futures have been key to obtaining approval for crypto ETFs.
