Bitwise Crypto Industry Innovators ETF
In May, Bitwise and Exchange Traded Concepts rolled out the first ETF to actually reference “crypto” in its name, something that the SEC has been cagey about allowing.
The Bitwise Crypto Industry Innovators ETF (BITQ) does not invest directly in bitcoin or other cryptocurrencies but instead focuses on the companies that make the cryptocurrency space possible by providing support services and equipment.
BITQ comes with an expense ratio of 0.85% and lists on the NYSE Arca.
Importantly, this is not a bitcoin fund. The fund tracks the Bitwise Crypto Innovators 30 Index, which covers companies that provide services and equipment to the cryptocurrency space, including crypto mining firms, crypto mining equipment suppliers and crypto financial services companies, according to the prospectus.
The index divides eligible companies into two tiers, with Tier 1 (85% of the index) representing pure-play companies and Tier 2 representing large cap companies that have significant business operations in the cryptocurrency space or significant assets held in cryptocurrencies (15% of the index).
The index selects the top 20 components from Tier 1 and the top 10 from Tier 2. Individual holdings are capped at 10% of the index, while reconstitutions and rebalancings take place on a quarterly basis.