Bitwise: 10% of the profits from the spot ETF goes towards Bitcoin development

Bitwise is one of the issuers of spot Bitcoin ETFs on US exchanges. 

His Bitwise Bitcoin ETF will be listed today on the NYSE, the New York Stock Exchange, with the ticker BITB. 

Bitwise: the donation of part of the profits from the Bitcoin ETF

Yesterday, the company officially announced that it will donate 10% of BITB profits to the open source development of Bitcoin.

Bitwise Asset Management will indeed donate 10% of the profits generated by its Bitcoin ETF to three non-profit organizations that finance the open-source development of the first cryptocurrency, namely Brink, OpenSats, and the Bitcoin Development Fund of the Human Rights Foundation.

The selected non-profit organizations have been chosen for their specific mission and proven experience in funding open source development on Bitcoin, and the list of beneficiaries will be updated annually.

Donations have no restrictions on who will receive them, and will be made annually for at least the next 10 years. 

The CEO of Bitwise, Hunter Horsley, stated that they are excited to provide a continuous source of funding for the “unsung heroes” who tirelessly work to improve the security, scalability, and usability of the Bitcoin network every day.

Horsley also pointed out that Bitcoin was launched 15 years ago without any fundraising, and that it has always been maintained by an open-source community of developers. 

The executive director of Brink, Mike Schmidt, stated that it is important to support the long-term sustainable development of Bitcoin Core. Bitcoin Core is the world’s leading software for managing a Bitcoin node. 

The co-founder of OpenSats, Matt Odell, added that Bitwise is setting an example for all Bitcoin ETF issuers. 

The strategic director of the Human Rights Foundation, Alex Gladstein, commented that Bitcoin is a fundamental piece of technology for freedom in service of financially oppressed people worldwide. He also stated that they have launched the Bitcoin Development Fund precisely to support the developers who make all this possible. 

Bitwise’s ETF on Bitcoin spot

BITB is a Bitcoin-backed equity fund, whose shares are traded on the stock exchange (ISIN US09174C1040).

Initially it has an AUM of 2.5 million dollars, and has issued 100,000 shares. Therefore, the initial price of a single share is $25. 

Since 2.5 million dollars correspond to about 55.5 BTC, and since 100,000 shares have been issued, each share should correspond to about 0.000555 BTC. 

Therefore, the price of BITB shares on the New York Stock Exchange will not correspond to that of BTC, but the trend over time should be more or less the same. 

Any deviations are called premium or discount on NAV, and are measured as the percentage deviation of market capitalization from the market value of NAV (Net Asset Value), or AUM (Asset Under Management).

The NAV in this case is nothing more than the market capitalization of the BTC owned by the fund, while the premium or discount on the NAV is the difference between the market capitalization of the fund and the NAV itself. 

A groundbreaking event

The approval yesterday by the SEC of a total of 11 new Bitcoin spot ETFs in the USA is to be considered an epochal event for Bitcoin itself, for the crypto markets, and probably also for the financial markets in general. 

The reason was explained by Coinbase with a long post on their official blog.

According to Greg Tusar and Brett Tejpaul, this event reaffirms that the future of money is this. 

Obviously, the post emphasizes that Coinbase is a partner of 8 out of the 11 ETFs approved yesterday, and defines it as “a turning point for the expansion of the crypto economy.” 

In fact, these Bitcoin ETFs are issued by the world’s largest asset managers, who will likely unlock diversified pools of new investors, stimulating long-term growth and innovation in Bitcoin and the crypto market. 

Furthermore, they predict that the SEC could soon approve the issuance of ETH spot ETFs in the USA. 

They write:

“These ETFs will not only provide investors with access to cryptocurrencies in a familiar and regulated product, but will also usher in a new wave of cryptocurrency adoption fueled by the world’s largest asset managers.”

The key point is not in itself the addition of these financial products to the US stock exchanges, since for example they have already been present on Canadian stock exchanges for some time, but the fact that they are sponsored by giants like BlackRock and Fidelity. 

The groundbreaking turning point for the crypto markets is that now it will be the world’s largest asset managers, primarily BlackRock, to promote the purchase of BTC to their clients, even if indirectly, who are numerous and very wealthy.