Bitwise’s Chainlink ETF Proposal Sends Shockwaves Through Crypto Markets
Wall Street meets blockchain as Bitwise drops regulatory bombshell.
The ETF Arms Race Heats Up
Bitwise just lobbed a grenade into traditional finance's playground with its Chainlink ETF filing. This isn't just another fund—it's a direct bridge between legacy markets and decentralized oracle networks. The move signals institutional recognition that real-world data connectivity matters more than ever.
Market Mechanics Get Disrupted
Traditional funds scramble as crypto-native firms demonstrate sharper understanding of value flows. Chainlink's oracle infrastructure suddenly looks like the plumbing Wall Street wishes it had built. Price feeds, weather data, sports outcomes—all now potentially packaged for mainstream consumption.
The Compliance Gambit
Bitwise's filing cleverly navigates regulatory minefields that sunk earlier crypto ETFs. By focusing on Chainlink's utility rather than pure price speculation, they might just have found the SEC's elusive 'off-ramp' for approval. Because nothing satisfies regulators like wrapping innovative technology in traditional financial packaging.
Institutional Money Eyes New Prize
Pension funds and endowments previously allergic to crypto now see familiar structures emerging. The proposal could unlock billions in previously sidelined capital—provided everyone pretends the underlying assets aren't still viewed by some regulators as digital casino chips.
Wall Street's latest attempt to co-opt blockchain innovation proves once again: if you can't beat the technology, just slap a ticker on it and charge management fees.
Bitwise Asset Management recently submitted a preliminary application to the US Securities and Exchange Commission (SEC) for an Exchange-Traded Fund (ETF) based on the altcoin Chainlink
$23 (LINK). This new ETF is designed to track the spot price of LINK, the main asset of the chainlink network, thereby offering investors a regulated market tool. The move aligns with the increasing interest in diversified crypto investments that extend beyond Bitcoin
$109,902 and Ethereum
$4,426, aiming to cater to the growing demand for blockchain-based financial products.
How Will Bitwise’s Chainlink ETF Operate?
In its detailed application, Bitwise outlined that the ETF’s Core objective is to accurately reflect the price of LINK tokens. The company has named Coinbase Custody Trust Company as the custodian, while Coinbase itself will act as the principal transaction broker. The ETF shares are expected to be listed on a national exchange in the United States, although the exact platform has not yet been disclosed. The application emphasizes a structure that operates through traditional creation and redemption mechanisms, allowing for transactions in cash or assets. The ETF will manage these operations through a method known as “Trust-Directed Trade,” conducted via the main transaction broker.
Chainlink is a decentralized oracle infrastructure that connects blockchains with real-world data. Offering secure access to off-chain data sources is essential for smart contracts and DeFi protocols, safeguarded by LINK tokens. This altcoin also encourages node operators to participate in the network and plays an active role in network governance.
No Staking Mechanism in the ETF
One notable aspect of the ETF application is the absence of any staking plans for LINK tokens. Despite the SEC’s recent clarification that staking activities do not violate federal securities laws, Bitwise’s Chainlink ETF will solely rely on the spot market price. This approach aims to provide investors with direct price exposure, excluding enhancements from staking rewards.
Bitwise’s initiative demonstrates a shift in current crypto-based ETFs beyond Bitcoin and Ethereum, with a focus on single-asset offerings. Grayscale has also recently applied to convert its Avalanche Trust into a spot ETF. The flurry of activity among issuers signifies Wall Street’s accelerating effort to broaden its range of crypto investment products.
Matt Hougan, the Chief Investment Officer of Bitwise, described Chainlink as one of the “cleanest” investment options in a report published in July. He noted the potential surge in LINK’s significance with the increasing trend toward tokenization.
According to data from CryptoAppsy, at the time of the report’s preparation, LINK coins were trading at $23.24, reflecting a 4.93% decrease over the past 24 hours.
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