The SEC Just Approved the First Bitcoin and Ethereum ETF. Here's What That Means for Crypto

In a groundbreaking move, the U.S. Securities and Exchange Commission (SEC) has granted accelerated approval for NYSE Arca to list and trade shares of the Bitwise Bitcoin and Ethereum ETF.

The U.S. Securities and Exchange Commission (SEC) has granted accelerated approval for NYSE Arca to list and trade shares of the Bitwise Bitcoin and Ethereum ETF. This marks the third approval for a dual Bitcoin and Ethereum ETF, following similar decisions for Hashdex and Franklin Templeton in December.

The SEC’s decision to expedite the listing and trading of the Bitwise Bitcoin and Ethereum ETF is noteworthy, as it highlights the regulator's growing familiarity with crypto-based investment products. According to a filing made on January 30, the regulator is becoming increasingly accustomed to these types of funds, leading to a more efficient approval process.

The ETF's structure will see it hold Bitcoin, Ethereum, and cash, with asset allocations weighted based on each cryptocurrency’s market capitalization. The fund will calculate its net asset value (NAV) daily, utilizing CME CF Bitcoin – New York Variant for Bitcoin and CME CF Ether – Dollar Reference Rate – New York Variant for Ethereum. This approach offers investors a simple and regulated way to gain exposure to these leading digital currencies.

The approval of the Bitwise Bitcoin and Ethereum ETF is a pivotal moment for the cryptocurrency industry. With the SEC’s move signaling growing familiarity and acceptance of crypto-related investment products, investors now have a secure and regulated means of accessing the two most prominent cryptocurrencies. The ETF will track the combined value of Bitcoin and Ethereum, minus operational expenses, giving investors an easy way to diversify their portfolios with digital assets.

ETF investors can purchase or redeem shares in Creation Units, initially consisting of at least 10,000 shares, with the goal of providing institutional and retail investors with a regulated pathway to crypto exposure. This approval is seen as a major boost for the legitimacy of cryptocurrency in traditional financial markets.

The SEC’s approval of the Bitwise Bitcoin and Ethereum ETF follows a period of anticipation and speculation within the crypto community. With the ETF set to begin trading imminently, it will be interesting to observe how the market responds and whether the broader crypto-verse takes another step towards mainstream integration.