How Does NYSE Arca’s Latest Filing Legitimize Solana ETFs?

NYSE Arca files to uplist BitWise 10 Crypto Index Fund as an ETP. What does this mean for $SOL?

Published: Nov 15, 2024 at 18:32
Edited: Nov 26, 2024 at 10:38

On November 15, NYSE Arca filed to list the world’s largest crypto index fund, the BitWise 10 Crypto Index (BITW) as an exchange-traded product (ETP).

The landmark filing indicates TradFi’s growing appetite for the digital asset industry, which is currently valued at over $3T. If approved, NYSE Arca’s filing could help further legitimize crypto assets and improve the chances of a Solana ETF approval.

NYSE Arca Files 19b-4 Form to Uplist BitWise Index

Boasting over $1.24B in AUM (Assets Under Management), the Bitwise 10 Crypto Index Fund is the largest index of its kind in the world. BitWise argues that converting the publicly traded trust to an ETP structure will introduce a wealth of benefits to shareholders, including improved efficiency and greater regulatory protections.

“Bitwise believes that ETPs are among the most efficient, convenient, and useful vehicles for providing crypto exposure. We remain committed to converting BITW to an ETP.” - Hunter Horsley, Bitwise CEO

Under the ETP structure, BITW would be able to accept subscriptions and redemptions at NAV (Net Asset Value), allowing the product to trade on secondary markets more efficiently.

Bitwise Chief Investment Officer Matt Hougan expressed excitement about the continued growth and adoption of the Bitwise 10 Crypto Index Fund.

“From Bitwise's beginning in 2017, we've sought to give investors easy exposure to crypto's groundbreaking potential. BITW opened up new possibilities as the first fund to provide a broad, index-based approach to crypto markets, and it remains the leader in its class. We’re excited for the next phase of BITW’s development.” - Matt Hougan, Bitwise Chief Investment Officer

The Bitwise 10 Crypto Index Fund holds a collection of the industry’s top 10 assets weighted by market cap. To stay abreast of the crypto industry’s rapid market dynamics, the BITW is rebalanced on a monthly basis.

As of October 31st, Solana is the BITW Index’s third largest holding, representing 4.3% of its total AUM.

How Does This Filing Benefit Solana ETF Chances?

If approved, NYSE Arca’s filing is a step towards greater acceptance and adoption of the blockchain industry by traditional finance. By converting to an ETP, the Bitwise 10 Crypto Index is expected to enjoy increased activity on secondary markets.

This will in turn allow alternative cryptocurrency assets like Solana to demonstrate more sustainable trading history in TradFi markets, which could help Solana ETF approval chances.

Currently, spot crypto ETFs are unlikely to be approved without first demonstrating a reliable trading history in CME futures markets. In a previous interview with SolanaFloor, Chanchal Sammader, Bitwise Europe’s Head of Product, reaffirmed this stance:

“One of the critical factors was that it [Ethereum] had a regulated futures, CFTC regulated futures on the CME. I think for a Solana ETF in the U.S., you're probably going to need that,”

However, commentators have argued that a Trump Presidency could speed the process along. Bloomberg analysts Mathew Sigel and Eric Balchuas have speculated that a change in administration at the White House could lead to a more streamlined approvals process for digital assets.