The company has several steps before it can begin trading. The first is an announcement to current shareholders, Horsley said, which occurred on Friday. Bitwise will also have to publish public disclosures in accordance with ATS reporting standards and have a market maker file a Form 211 with FINRA.
Bitwise has revealed a plan to soon let retail investors trade its large-cap index product.
The asset manager told CoinDesk Friday that it’s 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 would be able to trade the fund on popular platforms including Charles Schwab and TD Ameritrade, said CEO Hunter Horsley.
Once FINRA approves the Form 211, trading can commence.
«We expect approval for trading in the second half of 2020,» Horsley said. «It’ll take a number of months for trading to commence.»
He likened the process to Grayscale Investments’ Bitcoin Trust product, which already trades on OTCQX. Grayscale currently lists shares of its Digital Large Cap Fund, Ethereum Trust and Ethereum Classic Trust on the platform.
Like the Grayscale large-cap fund, the Bitwise 10 Index Fund is a diversified one. Horsley noted it holds assets representing 85 percent of the crypto market capitalization.
«It has a formal public methodology, has governance – both a committee and an advisory board – and it’s designed with several rules to screen and handle the nuances of the crypto space,» he said.
The fund includes bitcoin, ethereum, XRP, bitcoin cash, litecoin, EOS, tezos, stellar lumens, ADA and ethereum classic.
Interest in this type of product is growing, Hunter said, adding that Bitwise is holding some 2,000 calls per month with advisors.
According to a survey Bitwise published earlier this year, 72 percent of advisors said their clients were asking about crypto. About 6 percent of respondents already allocate funds to crypto assets, and this figure is set to double by the end of the year, Horsley said.
Nor does he see the current economic downturn due to the COVID-19 outbreak to be a major concern.
Still, he noted that «during a panic, everything can happen.»
«We’re continuing work on the bitcoin ETF, so the index fund here would exist alongside a future bitcoin ETF as another option,» he said.
Bittrex Takes Out Record $300M Insurance on Crypto Held in Cold Storage
Bittrex has insured digital assets held in its cold (or offline) storage to up to $300 million, the highest coverage yet offered by a cryptocurrency exchange.The company announced the news Thursday, saying it has obtained digital asset insurance that will protect users’ holdings in cases of «external theft and internal collusion.»
Bittrex CEO Bill Shihara said the cover, which has a limit of up to $300 million, offers «peace of mind» and would show clients the exchange is «committed to prioritizing security throughout all of our decisions and forward-looking blockchain technologies.”
The insurance was underwritten by Arch Syndicate 2012, which provides specialized insurance for corporations. The policy was approved after the exchange demonstrated its internal security and compliance protocols, and was supported by other syndicates based out of Lloyd’s of London, one of the world’s largest insurance markets.
The term «external theft» is likely to mean a theft via a physical intrusion into Bittrex’s crypto vault, as cold wallets are not generally vulnerable to hacking. The cover may be similar to Arch’s Blue Vault, which provides limits of up to $150 million and covers the loss of digital assets due to internal and external theft (via direct access to the storage media) and also includes employee collusion.
CoinDesk has contacted the exchange to clarify the cover more precisely.
Sarah Downey, the co-leader of the Digital Asset Risk Transfer (DART) team at Marsh, the insurance broker that assisted Bittrex in drawing up the policy, said: “Insurance plays a critical role in the growth and development of any business, including those that work with blockchain technology and digital assets.»
Insurance coverage is a growing trend among businesses that hold users’ cryptocurrency. Custodial solution KNØX has insurance, also from Lloyd’s, which covers losses of up to $100 million. The Winklevoss brothers created their own insurance company earlier this month to guarantee losses up to $200 million for Gemini exchange users.
Coinbase previously held the record for the largest insurance coverage in crypto, insuring against third-party attacks of up to $255 million for digital assets held in the exchange’s hot wallets. With Bittrex’s news this week, the bar has been raised by a cool $45 million.
