Bitwise and Cboe's Strategic Move in the Crypto ETF Arena

By: Isha Das

The cryptocurrency landscape is witnessing notable developments as Bitwise has filed a proposal for a Dogecoin exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC). This move signifies an increasing interest in establishing a market for diversified crypto-based financial products. Bitwise's decision follows their recent registration of a Dogecoin trust, which signifies their commitment to expanding the availability of products tied to popular digital currencies. This comes as no surprise considering Dogecoin’s significant market cap and liquidity, making it an attractive option for financial products.

In parallel, the Chicago Board Options Exchange (Cboe) is in the midst of another strategic effort to introduce Solana ETFs, having refiled for the third time with the SEC. It seems the equities market operator is addressing the previous concerns raised by the regulator, with hopes that the revised submissions, which include applications for Solana ETFs from companies such as VanEck and 21shares, will secure approval. Cboe’s persistence highlights a growing competitive race in the crypto market as operators strive to launch new trading opportunities.

Notably, Bloomberg ETF analysts have expressed varying expectations about these developments. While the analysts foresee potential regulatory changes that might favor approval, they also caution that new administration under the SEC might approach these Dogecoin-linked assets differently. The use of the 1933 Act in Bitwise’s application — a regulatory strategy also employed by BlackRock for its Bitcoin ETF product — exemplifies a tactical maneuver meant to align with existing regulatory frameworks.

Industry experts like Eric Balchunas have pointed out that while both Bitwise and Cboe are making strides, the competitive edge could favor jurisdictions like Canada, where filings for Solana ETFs by Purpose Investments and 3iQ Digital Asset Management have already been made. Canada’s regulatory environment, often regarded as more progressive, means it might leap ahead in approval timelines, despite the U.S. industry's initiative to be forerunners through early filings. As this competitive ETF race unfolds, the market anticipates crucial decisions that will shape the future dynamics of cryptocurrencies within global financial markets.