Bitwise: The path to Bitcoin ETF approval

“WebX” is a Web3 conference organized by CoinPost, which operates Japan’s largest Web3 media outlet, and hosted by the WebX Executive Committee. This year, it was held on August 28 and 29 at “The Prince Park Tower Tokyo”.

On the second day, a discussion on “ETFs (Exchange-Traded Funds) and Digital Assets” was held, featuring the following speakers:

• Katherine Dowling: General Counsel & Chief Compliance Officer at Bitwise
• Henry Zhang: Founder & CEO of DigiFT
• Norbert Gehrke (Moderator): Founder & Representative Director of Tokyo FinTech

Katherine emphasized the significance of the SEC approval for the first Bitcoin Spot ETF in the US this year, enabling both institutional and individual investors to invest in Bitcoin through their securities accounts. Bitwise’s “BITB” is among the 11 listed ETFs.

As Chief Compliance Officer, Katherine has been involved in the application process with the SEC for a long time, and she specifically mentioned the challenges of offering Bitcoin Spot ETFs as securities, with all the relevant disclosures, and the required dialogue with the SEC.

The type of ETF that the SEC approved requires USD contributions and redemptions (vs. “in kind” contributions and redemption, in which the underlying assets are handed over). Katherine stated that this method “is more cumbersome than BTC in-kind transactions, but it became a compromise,” emphasizing the asset management industry’s efforts towards realizing Spot ETFs.

DigiFT Founder Henry Zhang pointed out that “Bitcoin Spot ETFs are products that wrap BTC in traditional finance.” He commented, “As it penetrates traditional finance, awareness of real tokenization will spread more, making it easier to adopt.”

Bitwise is a U.S. asset management company offering Bitcoin spot ETFs and other products, with employees who have previously gained experience at companies like BlackRock, Meta, Google, and others. Leveraging their expertise in the Bitcoin ETF listing applications, they also launched the Ethereum spot ETF “AETH” at the end of July. Katherine emphasized that this SEC approval, so shortly after the Bitcoin ETF, came as a bit of a surprise to the industry.

Recently, Bitwise expanded into Europe by acquiring ETC Group, a London-based cryptocurrency ETP (Exchange-Traded Product) issuer, and on the August 27, they announced the acquisition of the competing investment trust “Osprey Bitcoin Trust (OBTC)” and its merger with their existing Bitcoin spot ETF “Bitwise Bitcoin ETF (BITB)”.

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