SEC Approves Wild Crypto Cocktail: Bitcoin & Ethereum ETF Mashup!

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In a move that could only be described as “Wall Street meets the Wild West,” the US Securities and Exchange Commission (SEC) has given the green light to the New York Stock Exchange (NYSE) to list and trade shares of Bitwise’s Frankenstein-esque Bitcoin and Ethereum exchange-traded funds (ETFs). 🎭

The SEC, perhaps feeling the pressure of the crypto crowd’s relentless memes, expedited the approval process, citing the ETF’s structural similarities to previously approved spot crypto ETFs. “It’s like déjà vu, but with more blockchain,” the agency might as well have said. 👻

Regulatory Approval & Compliance, or How to Tame a Wild Bull

The SEC, in its infinite wisdom, declared that the ETF aligns with securities laws, particularly Section 6(b)(5) of the Exchange Act. This section, for those unfamiliar, is like the crypto world’s version of “Obey the Law” signs at a rock concert. 🎸

“The Commission finds that the proposal is consistent with Section 6(b)(5) of the Exchange Act, which requires the exchange’s rules to prevent fraudulent and manipulative acts and practices, and to protect investors and the public interest,” the SEC solemnly intoned, as if reading a bedtime story to a room full of lawyers. 📖

While the industry eagerly awaits the final approval of Form S-1 (which is basically the crypto version of waiting for your food delivery), this decision marks the second joint crypto ETF approved by the SEC in recent weeks. 🍕

In December 2024, the regulator approved a similar ETF filed by Hashdex and Franklin Templeton. These ETFs, initially holding spot Bitcoin and Ethereum, were speculated to launch in January by Bloomberg analyst Eric Balchunas, who probably has a crystal ball. 🔮

Unlike those investment products, Bitwise’s combined Bitcoin and Ethereum ETF will remain limited to the two leading digital assets, with no plans to add additional cryptocurrencies. “Because why complicate things?” Bitwise might have said, while sipping a martini. 🍸

The ETF will calculate the market capitalization of Bitcoin and Ethereum by multiplying pricing benchmarks by their respective circulating supplies. Currently, Bitcoin and Ethereum have market capitalizations of $2.7 trillion and $394 billion, respectively, according to CoinMarketCap. 💰

The fund will be managed by Bitwise Investment Advisers, with Coinbase serving as the custodian for digital assets. Additionally, Bank of New York Mellon has been selected to act as the cash custodian, administrator, and transfer agent for the product. 🏦

Surge in Crypto ETF Filings: The Gold Rush 2.0

The approval comes amid a wave of crypto ETF applications submitted in early 2025. On January 28, Bitwise filed for a new ETF focused on meme coins, including Dogecoin (DOGE). “Because who doesn’t love memes?” the filing might as well have said. 🐶

Meanwhile, Cboe has submitted filings to list and trade Solana (SOL) ETFs from asset managers such as VanEck, Canary, Bitwise, and 21Shares. Additionally, on January 30, Coinbase Derivatives filed for new futures contracts on Solana and Hedera tokens. 🎰

Bloomberg ETF analyst James Seyffart noted that ETF issuers are “testing the limits of what this SEC is going to allow,” referencing a recent filing by Tuttle Capital for ten leveraged crypto ETFs. “Because why stop at one risky bet when you can have ten?” Seyffart might as well have added. 🎲

Meanwhile, the SEC’s shifting stance on crypto ETFs comes amid leadership changes following Donald Trump’s return to the White House. SEC Chair Gary Gensler stepped down in January after Trump’s inauguration, leading to the appointment of Mark T. Uyeda as acting chair. 🎩

Uyeda’s temporary leadership could indicate a more lenient regulatory approach toward the industry under the second Trump administration. Paul Atkins, a former SEC commissioner known for his pro-business and deregulatory stance, is expected to be confirmed as the agency’s permanent chair in the coming months. “Because what could go wrong?” someone in Washington might as well have whispered. 👀

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2025-01-31 12:17