NYSE Arca filed to list and trade Bitwise’s new exchange-traded product (ETP) that offers direct spot exposure to Bitcoin (BTC) and Ethereum (ETH). 

Bitwise’s proposed ETP would offer investors balanced exposure to Bitcoin and Ethereum, weighted according to their market capitalizations. 

While some might view the two assets as competitors, Bitwise Chief Investment Officer Matt Hougan compares them to gold and tech stocks—two separate assets that both play important roles in a well-rounded portfolio.

As Hougan put it, "Bitcoin and ether aren’t competitors any more than gold and tech stocks are competitors." 

Underlying Assets and NAV Calculation

The Bitcoin-Ether ETP would be listed under NYSE Arca Rule 8.201-E, which governs Commodity-Based Trust Shares. Its primary goal is to provide exposure to the value of its holdings, minus operational expenses and liabilities. The Net Asset Value (NAV) of the fund will be calculated daily using trusted CME CF pricing benchmarks for both Bitcoin and Ethereum.

Bitwise has stated that this dual-asset ETP will provide a more transparent and reliable way to track the value of Bitcoin and Ethereum. 

The fund will use the CME CF Bitcoin – New York Variant for Bitcoin and the CME CF Ethereum – Dollar Reference Rate – New York Variant for Ethereum. These benchmarks ensure that the fund's pricing reflects the true market value of the two assets.

The Impact on the Crypto Market

If approved, this Bitcoin-Ethereum ETP would be the first product of its kind in the U.S. market. Investors would have access to both digital assets in one fund, simplifying the process of diversifying their crypto portfolios. 

Bitwise’s previous success with Bitcoin and Ethereum spot ETFs also provides confidence in the potential of this new offering. The company has already amassed $4.2 billion in assets under management with its existing Bitcoin and Ethereum ETPs.

Rising Competition in the ETF Space

However, Bitwise is not alone in its quest to offer crypto-related ETPs. Other players are also seeking approval for similar products. For instance, Franklin Templeton’s Crypto Index ETF, which tracks Bitcoin and Ethereum, is awaiting approval from the U.S. Securities and Exchange Commission (SEC). Unlike Bitwise's offering, the Franklin Templeton ETF is not market-cap-weighted.

Meanwhile, Brazilian asset manager Hashdex has filed for its own Bitcoin-Ethereum ETF, the Hashdex Nasdaq Crypto Index US ETF. The exact timeline for the launch of this product remains unclear.

While the Bitwise filing has been made, it remains to be seen whether the SEC will approve the ETP for listing and trading on NYSE Arca. The SEC has been cautious in approving cryptocurrency-related financial products, with recent delays in the approval of other ETFs. 

In addition, the SEC is set for a leadership change in 2025, with Chair Gary Gensler expected to resign, potentially influencing future decisions on crypto-related ETFs.