Bitwise

Bitwise Investments is a San Francisco-based investment management firm founded in 2017 by Hunter Horsley, a former Facebook and Instagram product manager, and Hong Kim, a Google veteran and former Korean military software security expert.

In October 2017, it launched the world’s first cryptocurrency index fund, the Bitwise 10 Crypto Index Fund, as a basket of the largest coins, weighted by 5-year diluted market capitalization.

It also manages the Bitwise Bitcoin Fund, the Bitwise Ethereum Fund and the Digital Asset Index Fund, the latter together with Morgan Creek Capital.

The firm also creates and maintains indices, some of which are used by other fund providers.

In March 2020, Bitwise revealed that it was working to list shares of its Bitwise 10 Index Fund on OTCQX, an alternative trading system regulated by the U.S. Securities and Exchange Commission (SEC). If approved, retail investors and advisors will be able to trade the fund on popular platforms including Charles Schwab and TD Ameritrade.

In July 2018, Bitwise submitted a proposal to the U.S. Securities and Exchange Commission for an exchange-traded fund (ETF) tied to the top 10 cryptocurrencies. This proposal was denied, and in January 2019, the firm submitted another ETF proposal, this time tying the value to bitcoin plus any “meaningful hard forks.” This was also rejected, although the SEC later decided to review this rejection. Bitwise withdrew the proposal in January 2020.

In May 2019, Bitwise presented a report to the SEC that was the first to detail some of the dubious practices that many exchanges use to artificially enhance trading volume. It argued that the actual spot bitcoin market was smaller and more regulated than public perception understood, and went as far as to identify 10 exchanges that had “clean” volumes: Binance, Bitfinex, Coinbase, Kraken, Bitstamp, BitFlyer, Gemini, itBit, Bittrex, and Poloniex.