Bitwise Innovates with On-Chain Transparency for Bitcoin ETF

Bitwise, a prominent cryptocurrency asset management firm, has become the first in the United States to openly reveal the Bitcoin address holdings of its spot Bitcoin exchange-traded fund (ETF). This pioneering step not only enhances the transparency of its operations but also marks a significant stride in aligning with the fundamental principles of blockchain technology.

Enhancing Investor Trust and Regulatory Compliance

Bitwise’s decision to publicly disclose its Bitcoin addresses associated with its ETF holdings, named BITB, comes when the demand for transparency and accountability in the cryptocurrency sector is at an all-time high. This move is a proactive approach to fostering investor trust and addressing growing concerns about verifying asset backing and allocation within ETFs. By allowing anyone to verify BITB’s holdings and flows directly on the blockchain, Bitwise sets a new standard for transparency in the industry.

Announcement: Today the Bitwise Bitcoin ETF (BITB) becomes the first U.S. bitcoin ETF to publish the bitcoin addresses of its holdings.

Now anyone can verify BITB's holdings and flows directly on the blockchain.

Onchain transparency is core to Bitcoin's ethos. We're proud to… pic.twitter.com/1JTUh3zvDE

— Bitwise (@BitwiseInvest) January 24, 2024

In addition to bolstering investor confidence, this initiative places Bitwise at the forefront of regulatory compliance and investor communication. The firm’s willingness to voluntarily share such critical information demonstrates its commitment to establishing an industry benchmark and building credibility for Bitcoin investment products. This move is particularly significant in the context of the recent approval by the United States Securities and Exchange Commission (SEC) of the first-ever spot Bitcoin ETFs.

Bitwise’s Role in Market Transparency

Bitwise’s transparent approach also responds to the broader industry’s call for greater openness. The firm intends to further this initiative by collaborating with entities like Hoseki, which provides real-time cryptographic attestations. Such partnerships are expected to elevate the level of transparency and contribute to the evolution of the industry’s infrastructure.

Moreover, Bitwise’s actions complement recent developments in the ETF sector. Onchain intelligence firm Arkham recently identified four groups of connected addresses linked to new spot Bitcoin ETFs, including those managed by Blackrock, Fidelity, Bitwise, and Franklin Templeton. Bitwise’s BITB fund has been reported to hold 11,188 BTC, consistent with the firm’s disclosures. These revelations, enabled by the openness of firms like Bitwise, are pivotal in enhancing market transparency and providing investors with a clearer picture of fund holdings.

Breaking: ETF addresses for Blackrock, Fidelity, Bitwise, and Franklin Templeton are now on Arkham.

Arkham has identified the on-chain location of four of the Bitcoin ETFs. We are the first to publicly identify these addresses.

Links and holdings breakdown below: pic.twitter.com/gFJAIklwtc

— Arkham (@ArkhamIntel) January 22, 2024

Coinbase Custody, a key player in the management of digital assets for ETFs, oversees the assets of most of these funds, except for Fidelity’s. Fidelity uses its custody services to manage its Bitcoin reserves. The involvement of reputable firms like Coinbase in these transactions further underscores the growing institutional acceptance and regulatory adherence in the cryptocurrency market.

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