Bitwise Bitcoin ETF (BITB) has published the on-chain addresses of its holdings – the first issuer among the 11 approved funds to do so.
This important decision enables public verification of BITB's holdings and flows directly on the blockchain.
Bitwise's move is in line with Bitcoin's (BTC) core ethos, which emphasizes transparency and open verification. Bitwise also expressed its ambition to expand these efforts. Collaborations with companies like Hoseki are on the horizon, with the aim of providing cryptographic proof in real time.
Announcement: Today, Bitwise Bitcoin ETF (BITB) becomes the first U.S. Bitcoin ETF to publish the Bitcoin addresses of its holdings.
Now anyone can check BITB’s holdings and flows directly on the blockchain.
On-chain transparency is at the core of the Bitcoin ethos. We are proud of it… pic.twitter.com/1JTUh3zvDE
– Bitwise (@BitwiseInvest) January 24, 2024
By publishing the Bitcoin addresses of its holdings, BITB offers a new level of transparency. Investors can now check ETF holdings directly on the blockchain, ensuring accuracy and security.
However, investors must be aware that the addresses published by Bitwise only represent proof of its asset holdings and not proof of the company's reserves.
The US Securities and Exchange Commission (SEC) has approved several spot Bitcoin ETFs, with offerings from BlackRock and Fidelity leading the way. BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity's Wise Origin Bitcoin Fund (FBTC) combined accounted for 70% of all inflows into spot BTC exchange-traded products, with $1.9 billion and $1.6 billion respectively -Dollar. These two ETFs quickly reached $1 billion in assets under management (AUM), outperforming other registered funds from asset managers such as Bitwise and ARK 21Shares, which saw over $500 million in inflows.
In contrast, Grayscale's Bitcoin Trust (GBTC) saw significant outflows, losing nearly $4 billion in value, shortly after the SEC approved spot ETFs. Despite being the largest spot BTC ETF with a market cap of over $20 billion and holding over 500,000 Bitcoins, Grayscale transferred approximately 93,700 BTC to Coinbase Prime wallets. This move apparently created selling pressure on BTC as the fund liquidated tokens to meet redemption demands.
Grayscale's ETF, which charges the highest fee among its peers at 1.5%, has been criticized for its cost structure. CEO Michael Sonnenshein defended the fee, citing the ETF's size, liquidity and maturity as the oldest spot BTC ETF on the market. He noted that newer issuers were offering lower fees as low as 0.21% to attract investors in a competitive market.
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