United States regulators are soliciting comments on securities exchange NYSE Arca’s request to list a Bitwise exchange-traded fund (ETF) holding both Bitcoin (BTC) and Ether (ETH). This move follows a December 10 filing from Bitwise, which outlined the regulatory hurdles it faces in listing the ETF. On November 26, Bitwise and NYSE submitted filings to the SEC to list the ETF, claiming that the SEC is advancing the application to the next stage by soliciting industry comments.

The Bitwise Bitcoin and Ethereum ETF represents a proposed spot cryptocurrency index fund comprised of BTC and ETH. According to the filing, the ETF aims to provide investors with balanced exposure to the two largest crypto assets in the world through an easy-to-access format. The asset managers emphasized that this ETF will cater to retail investors seeking diversification across major cryptocurrencies.

The competition for listing crypto index ETFs is intensifying as issuers look to capitalize on the growing demand for such instruments. Following the initial wave of interest from institutional players like Grayscale and Blockfolio, other firms are also eyeing the crypto space. For instance, in August 2023, Katalin Tischhauser, head of investment research at crypto bank Sygnum, stated that index ETFs represent a logical next step for issuers after they listed Bitcoin and Ethereum separately earlier in 2024.

nyse fileld on November 27 to list another Bitwise index ETF called the Bitwise 10 Crypto Index Fund. This fund is expected to expand its basket of crypto assets, offering investors a broader range of options. In October 2023, NYSE Arca also sought SEC approval to list a proposed Grayscale index ETF, known as the Grayscale Digital Large Cap Fund.

Other notable developments in the crypto ETF landscape include the increasing competition from asset managers such as Hashdex and Franklin Templeton, which have already launched their own ETF proposals. These companies are joining forces with institutional players like Blockfolio and Grayscale to dominate this nascent market.

U.S. Crypto Regulatory Landscape

The push for crypto ETFs has been accelerated by U.S. President-elect Donald Trump’s commitment to establish the U.S. as a global crypto hub. Trump, who has previously expressed his desire to integrate cryptocurrency into the U.S. regulatory framework, is actively recruiting crypto-friendly leaders to head key financial regulators.

In November 2023, SEC Chair Gary Gensler made headlines for his tough stance on crypto regulation, vowing to depart from the agency as soon as Trump takes office in January 2025. Under Gensler’s leadership since 2021, the SEC has taken an aggressive regulatory approach toward cryptocurrencies, resulting in over 100 regulatory actions against industry companies.

With Trump in charge, issuers are now facing a new wave of competition for crypto ETFs, including index ETFs and staking-based ETFs. This dynamic is creating intense pressure on regulators to balance innovation with financial stability in the rapidly evolving crypto ecosystem.

Key Players in the Crypto ETF Race

  1. Grayscale Digital Large Cap Fund:拟议中的ETF由Grayscale管理，旨在追踪全球最大的20个 cryptocurrency资产。该基金的上市将为市场提供一个重要的基准指数，吸引更多投资者参与加密货币投资。

  2. Bitwise Bitcoin and Ethereum ETF:该项目旨在通过传统的ETF机制将 Bitcoin 和 Ethereum 带入普通市场，吸引零售投资者的关注。该项目的上市需要经过严格的监管审批流程。

  3. Other Competitors:包括Asset Managers如Hashdex和Franklin Templeton, 以及加密货币基金Blockfolio和Grayscale, 都已经展开了激烈的竞争。

Market Dynamics and Regulatory Challenges

The growing interest in crypto ETFs reflects the sector’s potential to disrupt traditional financial markets. However, regulators are under pressure to navigate a complex regulatory landscape while ensuring market integrity and consumer protection.

As the U.S. pushes toward its goal of becoming a global crypto capital, the interplay between innovation, regulation, and investor demand will continue to shape the crypto ETF industry in the coming years.