Investment firm Bitwise Asset Management has formally requested the U.S. Securities and Exchange Commission (SEC) to authorize the creation of the first U.S.-based spot exchange-traded fund (ETF) dedicated to Chainlink (LINK). Chainlink is a token associated with a decentralized network focused on oracle services. The proposed ETF intends to reflect the real-time market value of LINK, referencing the CME CF Chainlink-Dollar Reference Rate. It plans to directly hold LINK tokens. Coinbase Custody Trust Company is slated to serve as the custodian for the ETF’s assets, with Coinbase Prime handling trade executions. The ETF would facilitate both cash and in-kind transactions for creating and redeeming shares. Notably, the application avoids any mention of staking mechanisms, seemingly responding to recent SEC guidance suggesting staking operations on proof-of-stake blockchains are not deemed securities offerings [1].
This filing represents a noteworthy development within the U.S. cryptocurrency ETF sector, which has largely revolved around products tracking Bitcoin and Ethereum. Should approval be granted, the Bitwise Chainlink ETF would be the first of its kind in the U.S., specifically linked to a network oracle token, thereby broadening the range of digital asset investment opportunities for both large institutions and individual investors. Chainlink, launched in 2019, has evolved into a crucial element supporting decentralized finance (DeFi), the gaming industry, asset tokenization, and cross-chain interactions. Its technology empowers smart contracts to gain access to reliable, external data, and it has been integrated into systems of prominent financial institutions, including some central banking authorities [1].
Currently, LINK is valued at $23.42, making it the 13th largest cryptocurrency when ranked by market capitalization. Even so, its price has dropped by more than half since reaching its all-time high in 2021. This proposed ETF aims to meet a growing desire for more diverse cryptocurrency investments. Crypto ETFs worldwide have already seen nearly $30 billion in new investment this year, with total assets managed surpassing $150 billion. While Europe has Chainlink-related investment options, such as exchange-traded products (ETPs) offered by firms such as 21Shares and VanEck, the U.S. market holds the most substantial potential demand for these offerings [1].
The regulatory future for altcoin ETFs remains somewhat unclear, even after the SEC approved spot ETFs for Bitcoin and Ethereum. Bitwise appears to be trying to simplify the approval path with this fund’s structure: it focuses on holding only LINK, utilizes a single custodian, and avoids staking activities. However, final approval is not assured, and the SEC’s decision here could set precedents for future altcoin ETFs in the U.S. market [1].
Bitwise’s initiative reflects a wider trend of seeking to diversify crypto ETF offerings. The company also has pending applications for ETFs that would be linked to other cryptocurrencies, including XRP, Solana, Dogecoin, and Aptos. Separately, Grayscale is pursuing the conversion of its Avalanche Trust into a spot AVAX ETF. These actions suggest the crypto ETF market is expanding beyond its initial concentration on Bitcoin and Ethereum, with potential implications for greater institutional acceptance and increased capital flowing into the wider cryptocurrency sphere [1].
Source: [1] JUST IN: Bitwise Files for First-Ever Chainlink Spot ETF (https://coinpedia.org/news/just-in-bitwise-files-for-first-ever-chainlink-spot-etf/) [2] Bitwise Files for $LINK Spot ETF (https://coinpedia.org/crypto-live-news/bitwise-files-for-link-spot-etf/) [3] Bitwise Bitcoin Standard Corporations ETF (OWNB) (https://www.nasdaq.com/market-activity/etf/ownb) [4] Bitwise Bitcoin ETF | What is BITB? (https://www.bitget.com/price/bitcoin/etf/bitb)