Bitwise offers new Web3 ETF as some crypto funds

Bitwise Asset Management has launched a Web3 ETF as some of the biggest crypto-related funds have shown signs of rebounding despite the ongoing crypto slump.

The Bitwise Web3 ETF (BWEB) tracks a proprietary index that invests in up to 40 companies whose future growth prospects are directly linked to the development of Web3. More than 85% of the portfolio will be companies directly linked to such themes and business activities, according to the company.

Bitwise CEO Hunter Horsley called crypto the “cornerstone of Web3,” adding that many of the companies in the fund’s portfolio center their businesses around blockchain technology.

Top holdings in the ETF are Coinbase, Roblox, Equinix, Meta Platforms (formerly Facebook) and Unity Software.

“Today’s Web3 companies are not only helping to reshape the Internet as we know it, but are among some of the most disruptive and fastest-growing firms in the world,” Horsley said in a statement. “Bitwise Web3 ETF seeks to capitalize on this great opportunity by offering investors of innovation an easy way to access the space.”

The launch follows SoFi bringing a Web3 ETF (TWEB) to market in August. The fund is down 12.5% ​​since launch, but has risen 3.9% in the past month.

BWEB is Bitwise’s second ETF. Its Crypto Industry Innovators ETF (BITQ), which launched in May 2021, has around $64 million in assets under management. Down almost 67% year to date, BITQ is up about 2% from a month ago.

How are other crypto-related ETFs doing?

Amplify Transformational Data Sharing ETF ( BLOK ) – the largest blockchain ETF in the US with approximately $500 million in assets under management – ​​has also rebounded recently.

Some days more than three quarters through the year, BLOK was down about 51% for 2022, as of Tuesday morning. But the fund, which has MicroStrategy, IBM and Accenture as its top holdings, has returned 0.1% in the past month.

The ProShares Bitcoin Strategy ETF, which became the first in the US to invest primarily in bitcoin futures when it launched last October, is up more than 8% in the past 30 days despite an annualized return of -57%.

In the last month, bitcoin (BTC) is up 1.3%, while ether (ETH) is down 13.4%. BTC and ETH are each down roughly 60% from 12 months ago.

Dave Nadig, a financial futurist at VettaFi, said the price of bitcoin and ether should be somewhat disconnected from the “pick and shovel” games represented by mutual funds focused on crypto. He added that the crypto ecosystem has shown resilience in recent months.

“While this may have been a crypto winter, there are many signs that this is just setting the stage for the next crypto spring,” Nadig told Blockworks.

“Blockchain technology is not going away, and the hype of the hype is actually a positive long-term for the industry,” he said.

Other funds that are yet to show positive returns are at least trimming losses lately.

Siren Nasdaq NexGen Economy ETF (BLCN) and First Trust Indxx Innovative Transaction & Process ETF (LEGR) are down 46% and 27%, respectively, so far in 2022. But BLCN is down 8.5% in the past month, while LEGR is down 2 .8% during this period.

Overall, digital asset investment products, including ETFs, had a third straight week of inflows last week, according to CoinShares, with roughly $10 million going into such products during that period.

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