Bitwise Shakes Up Crypto ETFs with Third-Party Proof of Reserves for Bitcoin & Ethereum

Wall Street's favorite crypto sleight-of-hand just got a transparency upgrade.

Bitwise—the $2B asset manager that helped legitimize crypto ETFs—is forcing the industry to put up or shut up. Their new third-party proof of reserves system for Bitcoin and Ethereum ETFs means institutions can no longer fake the funk with imaginary coins.

The move comes as regulators circle like hawks around crypto's $50B ETF sector. 'This isn't your exchange's shady reserve audit,' quipped Bitwise's CTO. 'Actual accountants will verify every satoshi.'

For investors burned by paper-Bitcoin schemes, it's a rare win. The system uses Merkle proofs and cold wallet verification—the same tech that exposed FTX's empty vaults. Even Goldman Sachs can't argue with math.

Of course, this being crypto, someone will find a loophole by lunchtime. But for now? The grownups are finally checking the books.

• Bitwise now uses The Network Firm for daily Bitcoin and ETH ETF reserve checks.
• CPA-based reports will confirm both fund assets and liabilities.
• The system replaces Bitwise’s earlier method of publishing wallet addresses.

Bitwise Asset Management has launched a daily verification process for its spot Bitcoin and ethereum exchange-traded funds (ETFs). The firm will now use third-party proof-of-reserves audits instead of publicly listing wallet addresses. This seeks to strengthen transparency and ensure assets match fund obligations.

Daily Verification by Independent Auditor

Bitwise has partnered with The Network Firm, a U.S.-based accounting company, to carry out daily on-chain balance checks. These checks apply to the Bitwise Bitcoin ETF (BITB) and the Bitwise Ethereum ETF (ETHW). The firm compares the blockchain asset balances with the number of ETF shares in circulation.

Today, we’re introducing third-party Proof of Reserves transparency for the Bitwise Bitcoin ETF $BITB and the Bitwise Ethereum ETF $ETHW, provided by @The_NetworkFirm, a U.S.-based certified public accounting firm.

Live now, you can check daily balance updates on each fund’s…

This process ensures that fund holdings match the number of investor-owned shares each day. It replaces public wallet tracking with professional verification. The system is already in place and operating daily.

Bitwise also announced plans to add CPA-attested reports in the coming weeks. These reports will confirm both the assets and the liabilities of the funds. The goal is to provide a full and clear picture of reserve coverage.

Industry Shift After FTX Collapse

The FTX collapse revealed major gaps in asset reserves, which raised investor concerns. As a result, firms like Bitwise have adopted reserve checks to restore trust.

Bitwise’s new process is designed to confirm the secure storage of fund assets and ensure they match the number of ETF shares. The Network Firm reports follow common accounting standards. This allows investors and regulators to review and confirm the data with more confidence.

This helps make the information easy to review and understand. It also supports regulatory compliance as authorities increase surveillance in the crypto sector.

ETF Asset Levels and Market Approach

The Bitwise bitcoin ETF holds $4.9 billion in net assets, while the Ethereum ETF holds $358 million. These figures are smaller compared to BlackRock’s iShares Bitcoin Trust (IBIT), which manages $85.9 billion.

Bitwise aims to attract investors looking for more secure and transparent crypto funds by adopting independent proof-of-reserves. The company says the changes are part of a broader plan to meet rising expectations in digital asset investing.

This new approach supports Bitwise’s long-term goal of building investor trust. The company seeks to use daily audits and CPA-verified reports to align with best industry practices.