Bitwise Seeks SEC Approval for 11 Single‑Token Crypto “Strategy” ETFs
Crypto asset manager Bitwise is moving to deepen its presence in the United States ETF market with a sweeping new proposal: 11 exchange‑traded funds that each focus on a single altcoin, but do so through a defined “strategy” structure rather than a simple spot vehicle.
According to a recent filing with the U.S. Securities and Exchange Commission (SEC), the firm wants to roll out a suite of single‑token “Strategy ETFs” designed to give investors targeted, regulated exposure to individual digital assets beyond the best‑known names. The lineup is set to cover major altcoins such as Aave (AAVE), Uniswap (UNI), Zcash (ZEC), Bittensor (TAO), Sui (SUI) and Near (NEAR), among others.
Unlike plain spot ETFs that simply hold the underlying asset directly, Bitwise’s proposed funds follow a rules‑based framework to gain and manage exposure. Each ETF would implement a consistent methodology for how it allocates to the token itself, how it uses related exchange‑traded products (ETPs), and when it may rely on derivatives to adjust or maintain its target exposure.
How the “Strategy ETF” structure works
The filing outlines a split‑exposure model that distinguishes these products from straightforward spot offerings. Each fund would obtain exposure to its reference token by:
– Investing up to 60% of its assets directly in the cryptocurrency, and
– Holding at least 40% of its assets in securities issued by one or more ETPs that themselves invest in, or are linked to, that token.
On top of this core structure, the ETFs may use derivatives—such as futures or swaps—where appropriate to fine‑tune exposure, manage liquidity, or handle situations where direct spot markets are less efficient. In practical terms, that means investors get a package of direct holdings plus exposure via other regulated products, all wrapped in a single New York‑listed ETF.
This hybrid design is meant to sit somewhere between a pure spot product and a futures‑only strategy. It can potentially help the funds navigate regulatory constraints, custody challenges, and liquidity considerations in smaller or newer altcoins, while still offering a transparent, rules‑driven approach.
A different risk profile from Bitwise’s existing ETFs
Bitwise already operates a relatively broad menu of crypto‑related ETFs in the U.S. market. Its spot lineup includes:
– A spot Bitcoin ETF
– A spot Ethereum ETF
– A Solana staking ETF that holds SOL directly and participates in network staking
– A spot XRP ETF with direct exposure to XRP
On the equity and index side, Bitwise offers:
– A crypto industry innovators ETF that holds publicly listed companies active in the digital asset space (for example, exchanges and miners)
– A multi‑asset index ETF that tracks a screened basket of the largest cryptocurrencies by market capitalization
The company also manages futures‑based strategies tied to Chicago Mercantile Exchange (CME) crypto futures, giving investors a regulated route into synthetic exposure without holding coins directly.
The newly proposed single‑token strategy ETFs would complement, not replace, that existing shelf. Instead of broad baskets, they concentrate on one asset each, applying the same rules‑based structure across a range of altcoins representing decentralized finance (DeFi), artificial intelligence‑related platforms, privacy‑centric projects and layer‑1 smart contract ecosystems. As a result, they carry a more concentrated risk profile, which can amplify both potential returns and potential drawdowns compared to diversified funds.
Why focusing on single‑altcoin ETFs matters
Single‑token ETFs are a significant evolution for crypto markets because they bridge a gap between traditional finance and the more experimental corners of the digital asset world. For many institutional and retail investors, holding altcoins directly on exchanges or in self‑custody wallets raises a host of concerns:
– Regulatory uncertainty
– Custody and private key management risks
– Compliance and reporting complexity
– Operational friction and counterparty risk
An ETF structure helps address several of these issues. Shares can be bought and sold through standard brokerage accounts, held in retirement plans, and integrated into existing compliance frameworks. Settlement, custody and trading are managed by professional intermediaries under established regulations.
By packaging altcoin exposure this way, Bitwise is effectively trying to make niche or emerging tokens more accessible to investors who are comfortable with ETFs but not with transacting on crypto exchanges. For the underlying projects, successful ETF launches can translate into broader ownership, deeper liquidity and potentially more stable market participation over time.
Part of a broader wave of crypto ETF and ETP launches
Bitwise’s move comes amid an expanding wave of crypto‑linked ETF and ETP activity in the U.S. and globally. Over recent months, several issuers have stepped up efforts to bring altcoin‑specific and thematic products to market.
Other asset managers have filed for or launched products tied to assets such as Solana (SOL), XRP (XRP), Dogecoin (DOGE) and Avalanche (AVAX). Some focus on single tokens, while others group assets under themes like artificial intelligence, decentralized finance or layer‑1 infrastructure.
In parallel, there are initiatives to convert existing crypto trusts into fully fledged spot ETFs. One notable example involves efforts to transform single‑asset trusts—often historically limited in liquidity and trading discounts or premiums—into exchange‑listed funds with daily creation and redemption mechanisms. This trend reflects growing confidence that regulators will gradually expand the universe of permissible crypto ETFs beyond the first generation of Bitcoin and Ethereum products.
Against that backdrop, Bitwise’s 11‑fund proposal stands out for its scale and consistency. Instead of launching one or two isolated altcoin products, the firm is pursuing an entire suite built around a unified strategic template.
How these ETFs fit into the current regulatory climate
The regulatory environment for crypto in the U.S. remains complex and, in many areas, unsettled. Approvals for spot Bitcoin and Ethereum ETFs marked a breakthrough, but regulators have been more cautious when it comes to smaller, less established digital assets.
By framing these new vehicles as “strategy ETFs” rather than simple spot funds, Bitwise may be seeking a structure that aligns more comfortably with current SEC expectations. The use of a mix of direct holdings, ETP exposure and derivatives can, in principle, offer more flexibility in addressing concerns such as:
– Market manipulation and underlying liquidity
– Quality and reliability of trading venues
– Custody and safeguarding of digital assets
– Transparency of pricing and valuation
Nonetheless, SEC approval is not guaranteed. Each asset referenced by these proposed ETFs may raise its own questions around classification, trading environment and investor protection. The progress of these filings will be closely watched as a signal of how far U.S. regulators are willing to go in opening up mainstream access to a wider spectrum of tokens.
What investors should understand about single‑token crypto ETFs
For potential investors, single‑token strategy ETFs introduce both opportunities and risks. Key points to understand include:
– Concentration risk: Unlike diversified crypto index funds, each ETF targets one cryptocurrency. Price moves in that single asset will drive the fund’s performance, for better or worse.
– Volatility: Many altcoins are significantly more volatile than Bitcoin or Ethereum. Intraday swings and prolonged drawdowns can be substantial.
– Liquidity considerations: Strategy ETFs rely partly on other ETPs and derivatives. While this can improve execution, it also adds layers of liquidity and counterparty risk that differ from direct spot holdings.
– Tracking behavior: Because these funds combine spot, ETPs and derivatives, their performance may not perfectly mirror the spot market of the underlying token at every moment, especially during periods of market stress.
– Regulatory and technological risk: Underlying projects may face protocol upgrades, governance disputes, regulatory challenges or security incidents, any of which can affect token value and, by extension, ETF performance.
However, for those who already invest in traditional markets, the ETF wrapper offers familiar features: intraday trading, standard brokerage custody, options for tax‑advantaged accounts, and consolidated reporting.
Potential impact on the altcoin ecosystem
If approved and widely adopted, Bitwise’s strategy ETFs could influence the broader altcoin landscape in several ways:
– Increased institutional participation: Pension funds, advisers and asset allocators that were previously restricted from direct crypto trading may gain a compliant route to add altcoin exposure.
– More robust price discovery: Participation through regulated markets can deepen liquidity and potentially improve price discovery for the underlying tokens.
– Greater scrutiny on project fundamentals: ETF issuers must conduct due diligence, monitor risks and provide disclosure. This can indirectly raise the bar for altcoin projects hoping to achieve ETF inclusion.
– Shift in market behavior: As more trading migrates into ETF shares, there may be changes in how and where liquidity concentrates—between on‑chain activity, centralized exchanges and traditional exchanges.
Of course, there is also the possibility that new ETF inflows could temporarily push prices higher or magnify speculative cycles. Long‑term outcomes will depend on the quality of the projects involved and the maturity of the investor base.
How these products compare with holding coins directly
Prospective investors often weigh ETF exposure against buying tokens on an exchange or using self‑custody. Key contrasts include:
– Control vs convenience: Direct coin holders maintain control of their assets and can use them in on‑chain applications (staking, lending, governance). ETF investors trade some of that control for ease of access and regulated infrastructure.
– Yield and utility: Many altcoins offer staking yields or utility within their networks. Strategy ETFs may or may not pass through yield‑related benefits, depending on how they are structured and whether they participate in staking or similar activities.
– Security model: With self‑custody, security depends on how carefully private keys are managed. With ETFs, security is outsourced to institutional custodians, which can reduce some individual risks but concentrates others at the custodian and fund level.
– Tax and reporting: ETF structures can simplify tax reporting and reduce the need to track numerous individual crypto transactions, although tax treatment will vary by jurisdiction.
For investors primarily seeking price exposure without interacting directly with crypto infrastructure, ETF products can be appealing. Those who value on‑chain participation and full asset control may still prefer direct ownership.
What comes next for Bitwise’s application
The SEC will now review Bitwise’s filing through its standard process, which can involve multiple rounds of comments, amendments and public notices. Timelines are uncertain and depend on regulatory priorities, market conditions and evolving policy discussions around digital assets.
During this period, market participants are likely to focus on several questions:
– Which of the 11 proposed funds, if any, receive approval first?
– Will the SEC treat some altcoins differently from others based on perceived risk or regulatory status?
– How might early approvals shape the design of future single‑token and thematic crypto ETFs from other issuers?
Regardless of the immediate outcome, the filing underlines a clear trend: crypto asset managers are increasingly targeting the segment of investors who want exposure to more specialized tokens, but only through the familiar, regulated rails of the ETF market.
As the regulatory dialogue progresses, the success or rejection of these proposed strategy ETFs will help define the next phase in how altcoin investing intersects with mainstream financial products in the United States.