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Company Name:<\/strong> Bitwise Asset Management<\/p>\n Founders:<\/strong> Hong Kim and Hunter Horsley<\/p>\n Date Founded:<\/strong> December 2016<\/p>\n Location of Headquarters:<\/strong> San Francisco, CA and New York, NY<\/p>\n Amount of Bitcoin Held in Treasury:<\/strong> Undisclosed<\/p>\n Number of Employees:<\/strong> 65<\/p>\n Website:<\/strong> https:\/\/bitwiseinvestments.com\/<\/a><\/p>\n Public or Private?<\/strong> Private<\/p>\n In 2016, Hong Kim and his co-founder at\u00a0Bitwise Asset Management (Bitwise)<\/a>, Hunter Horsely, were living the startup life \u2014 working from a living room in San Francisco and looking for a project that they could develop into a business.<\/p>\n While experimenting with various ideas, none of which were gaining much traction, their friends wouldn\u2019t shut up about Bitcoin. Plus, by early 2016, every venture capital firm in Silicon Valley was focused on Bitcoin, as well.<\/p>\n \u201cWe wanted to avoid it for a long time because [there was] too much hype,\u201d Kim told Bitcoin Magazine. \u201cBut then, just by osmosis, we spent more and more time thinking about it.\u201d<\/p>\n By the end of the year, after doing their homework on Bitcoin, Kim and Horsely had incorporated Bitwise, a bitcoin-first crypto asset management firm that would provide wrappers for bitcoin so that customers could purchase these assets via traditional brokerages.<\/p>\n Eight years later, Bitwise was one of the 11 US firms to issue a spot bitcoin ETF; it\u2019s currently the 5th largest US spot bitcoin ETF as per the amount of assets under management (AUM)<\/a>. This is in part due to the Bitcoin enthusiasts who\u2019ve purchased it because of how Bitwise has maintained the Bitcoin ethos as it\u2019s interfaced with Wall Street.<\/p>\n There are a number of factors that differentiate the Bitwise Bitcoin ETF (BITB) from its competitors.<\/p>\n For one, Bitwise is the only company that issues a US spot bitcoin ETF that publishes the addresses of its bitcoin holdings, embracing the idea of transparency, a core Bitcoin tenet.<\/p>\n Announcement: Today the Bitwise Bitcoin ETF (BITB) becomes the first U.S. bitcoin ETF to publish the bitcoin addresses of its holdings.<\/p>\n Now anyone can verify BITB's holdings and flows directly on the blockchain.<\/p>\n Onchain transparency is core to Bitcoin's ethos. We're proud to\u2026 pic.twitter.com\/1JTUh3zvDE<\/a><\/p>\n — Bitwise (@BitwiseInvest) January 24, 2024<\/a><\/p><\/blockquote>\n \u201cEven now, many, many months have passed and still we’re the only Bitcoin ETF that discloses its holding addresses,\u201d said Kim. \u201cYou can go to a Bitcoin block explorer and check our on-chain holdings.\u201d<\/p>\n Kim also made the point that Bitwise is the only spot bitcoin ETF issuer that proactively communicates with its customers via social media.<\/p>\n \u201cWe are on Twitter talking about a product and answering questions,\u201d explained Kim.<\/p>\n \u201cI’ll explain anything and engage with the community. If there’s anything they’re upset about [regarding] the products, they can yell at us and we respond and take them seriously,\u201d he added.<\/p>\n What is more, Kim pointed out that Bitcoin remains Bitwise\u2019s primary focus, which makes the company much different from other spot bitcoin ETF issuers like BlackRock or Invesco who manage a plethora of other types of assets.<\/p>\n \u201cWe’ve been around for seven years or so and this is the only thing that we talk about,\u201d said Kim.<\/p>\n \u201cWhen prices go down when there’s a bear market, We don’t rotate to emerging markets or fixed income or whatever,\u201d he added.<\/p>\n \u201cThere might not be that big of a difference between BlackRock and Invesco or BlackRock or Franklin Templeton, but there’s a big difference between BlackRock and Bitwise.\u201d<\/p>\n Lastly, Bitwise has committed to giving 10% of its ETF fee profits to three nonprofits that support Bitcoin Core developers<\/a> \u2014 OpenSats<\/a>, Brink<\/a> and the Human Rights Foundation (HRF)<\/a> \u2014 for 10 years.<\/p>\n While many in the Bitcoin community have praised Bitwise for donating to Bitcoin Core developers, Kim sees this contribution as more of an obligation and less as a sacrifice.<\/p>\n \u201cAs a Bitcoiner, I feel that it’s not really a donation,\u201d said Kim.<\/p>\n \u201cThe US taxpayer doesn’t think that they’re donating to the military budget,\u201d he added.<\/p>\n \u201cThat\u2019s not a donation. That\u2019s your security budget.\u201d<\/p>\n Kim went on to explain that while Bitwise does manage some other crypto assets, two-thirds of the company\u2019s holdings is bitcoin. For this reason, he views supporting Bitcoin Core developers as contributing the technology that buoys his livelihood.<\/p>\n \u201cIf you’re like BlackRock, where you have all sorts of other [assets] and bitcoin is only one of them, then maybe you don’t feel that way,\u201d Kim said in regard to why a company like Bitwise cares about bitcoin more than some of the bigger traditional financial institutions that issued spot bitcoin ETFs.<\/p>\n \u201cIf you are like me or are in an economic situation like me and you care enough about Bitcoin, then it\u2019s not an optional matter that the Bitcoin network is as secure as it can be,\u201d he added.<\/p>\n Kim, Bitwise\u2019s CTO, who has a background in cybersecurity, explained why open-source developers are essential to Bitcoin, noting that many who don\u2019t understand how open-source technology works misperceive what Bitcoin developers do. He made the argument that the majority of Bitcoin developers aren\u2019t there to make radical changes to Bitcoin, but to keep it functional as it interfaces with other software.<\/p>\n \u201cYou can have an opinion about the latest contentious soft fork proposal or whatever, but 95% of the devs that we’re talking about don’t work on that,\u201d Kim explained.<\/p>\n \u201cThe 50 or so core devs that do this day in and day out, that’s not what they’re spending time on. Whenever there’s a new version of Linux or Mac or Windows, guess what \u2014 we need to make sure that Bitcoin Core compiles on that version,\u201d he continued.<\/p>\n \u201cSomebody needs to make sure that the software we depend upon continues to be compatible, well-documented, and runnable.\u201d<\/p>\n While Bitwise does a lot to differentiate itself from its competitors, Kim wants Bitwise to do something more profound than just being one of the better US spot bitcoin ETF issuers.<\/p>\n \u201cThere are ways of thinking about a business as the product [it offers] or how it\u2019s different from its competitors, but I think there’s another way of looking at a company as like, \u2018What are you here to do?\u2019\u201d explained Kim.<\/p>\n He shares that he and Horsely didn\u2019t start by asking themselves this question, though, now, it seems to be at the forefront of his mind.<\/p>\n \u201cI want Bitwise to be the company that helps accelerate and guide this movement, because it’s such an important thing for the world to have public money that everyone can access and that nobody controls,\u201d said Kim.<\/p>\n After sharing this, Kim acknowledged what he felt many might be thinking as they read this: You\u2019re offering exposure to bitcoin\u2019s price within the walled garden of traditional finance.<\/p>\n \u201cTradFi and Bitcoin culture are inevitably colliding and people rightfully have concerns and some kind of dissonance about that,\u201d said Kim. \u201cThat was really top of mind for me.\u201d<\/p>\n Kim reiterated that this is why Bitwise chose to donate to open-source Bitcoin developers, make their Bitcoin addresses public and engage with the Bitcoin community. And he also shared some information on what Bitwise is working on next: redeemable bitcoin.<\/p>\n Bitwise is currently speaking with policymakers in Washington, DC in efforts to have Bitwise facilitate in-kind redemptions of bitcoin from the Bitwise Bitcoin ETF. In layperson\u2019s terms, Kim wants Bitwise customers to be able to withdraw the bitcoin in which they\u2019ve invested via the ETF if they so please, whereas, right now, customers can only withdraw the cash value of the bitcoin in which they\u2019ve invested via bitcoin ETF.<\/p>\n \u201cThere are gold ETFs where you can redeem, even as an individual retail investor, and get gold coins and bars delivered to your door,\u201d explained Kim. <\/p>\n \u201cYou redeem in-kind without incurring a taxable event. There’s no reason that a bitcoin ETF shouldn’t be able to do that,\u201d he added.<\/p>\n \u201cThat would be a product that I would be proud of.\u201d<\/p>\n Kim believes that if Bitwise can make redeemable bitcoin a reality for investors, then spot bitcoin ETFs like BITB have the potential to become some of the biggest on-ramps to Bitcoin.<\/p>\n \u201cBitcoin ETFs are a huge improvement [in Bitcoin onboarding] in that most people have brokerage accounts,\u201d said Kim, who added that it\u2019s much easier to get family and friends to invest in bitcoin when they don\u2019t have to go through the hassle of setting up an account with a Bitcoin or crypto exchange.<\/p>\n \u201cIf your uncle at the Thanksgiving table is convinced and wants to put $100 into bitcoin, you no longer have to go, \u2018Wait a minute. First buy a ledger for $40\u2026\u2019 [Now, it\u2019s] just two taps and you have a hundred dollars worth of Bitcoin exposure,\u201d he added.<\/p>\n \u201cBut then, at any point in their journey, if they are so inclined, they can withdraw that. And in that sense, it can become a really clean and simple on-ramp.\u201d<\/p>\n While Kim acknowledged that many are skeptical this will ever happen \u2014 speculating that Wall Street wants as much bitcoin within walled gardens as possible \u2014 he also noted that many felt the same way about the spot bitcoin ETFs ever being issued. He requested some patience as Bitwise persists in its efforts to knock down the wall between Bitcoin and traditional finance.<\/p>\n \u201cThere’s a way of looking at Bitcoin ETFs as a clean and easy on-ramp and off-ramp and the lowest friction one for the average person,\u201d said Kim.<\/p>\n \u201cThat would be my ideal world, and that is a world that Bitwise is currently working on,\u201d he added.<\/p>\n \u201cIn that world, the ETFs and the on-chain world aren\u2019t as separate, but rather they can have a close relationship.\u201d<\/p>\nBitwise vs. All Other Spot Bitcoin ETF Issuers<\/h2>\n
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Donating To Open-Source Developers<\/h2>\n
On A Mission<\/h2>\n
Redeemable Bitcoin<\/h2>\n