2024-28343. Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To List and Trade Shares of the Bitwise 10 Crypto Index Fund Under Proposed NYSE Arca Rule 8.800-E (Commodity- and Digital Asset-Based Investment ...  

  • Portfolio asset Symbol Weight (%)
    Bitcoin BTC 75.10
    Ethereum ETH 16.5
    Solana SOL 4.30
    XRP XRP 1.50
    Cardano ADA 0.70
    Avalanche AVAX 0.60
    Chainlink LINK 0.40
    Bitcoin Cash BCH 0.40
    Polkadot DOT 0.30
    Uniswap UNI 0.30

    To determine the Trust's Net Asset Value (“NAV”) at the end of every Business Day,[10] the Sponsor will rely on a third-party valuation vendor, CF Benchmarks Ltd. (the “Valuation Vendor”), to calculate and publish the U.S. dollar price for each Portfolio Asset (each, a “Reference Price” and, collectively, the “Reference Prices”) as of 4:00 p.m. E.T. using prices from several different digital asset trading platforms selected by the Valuation Vendor.[11] Each Reference Price aggregates the trade flow of several major digital asset trading platforms during an observation window between 3:00 p.m. and 4:00 p.m. E.T. into the U.S. dollar price of one of each Portfolio Asset at 4:00 p.m. E.T. The Reference Price calculation is designed based on the IOSCO Principals for Financial Benchmarks.

    The Trust's only assets will be Portfolio Assets and cash.[12] The Trust ( print page 95854) does not seek to hold any digital assets other than Portfolio Assets and has expressly disclaimed ownership of any such assets in the event the Trust ever involuntarily comes into possession of such assets.[13] The Trust will not use derivatives that may subject the Trust to counterparty and credit risks. The Trust will process creations and redemptions in cash. The Trust's only recurring ordinary expense is expected to be the Sponsor's unitary management fee (the “Management Fee”), which will accrue daily and will be payable monthly in arrears. The Administrator will calculate the Management Fee by applying an annualized rate to the NAV of the Trust's assets at the end of each month. Financial institutions authorized to create and redeem Shares (each, an “Authorized Participant”) will deliver, or cause to be delivered, cash in exchange for Shares of the Trust, and the Trust will deliver cash to Authorized Participants when those Authorized Participants redeem Shares of the Trust.

    The Index

    The Bitwise Crypto Index Committee (the “Committee”), convened by the Index Provider, is the governing body of the Index and is responsible for developing, maintaining, and adjusting the methodology by which the Index is constructed (the “Index Methodology”).[14] The Index is comprised of ten digital assets (the “Index Components”) and is designed to track the performance of the ten largest digital assets that currently trade publicly on eligible digital asset trading platforms, as selected and weighted by free-float market capitalization. The market capitalization of a digital asset is calculated by multiplying its price [15] times its free-float-adjusted or “circulating” [16] supply. The proportion of each digital asset in the Index is based on this adjusted market capitalization.

    The Index will only consider for eligibility as Index Components digital assets that satisfy the following criteria:

    • The digital asset must be a cryptographically secured digital bearer instrument;
    • The digital asset must have a price that is not pegged to another digital asset, fiat currency, group of those currencies, or hard asset;
    • The digital asset must be freely traded and can be freely held for the foreseeable future;
    • The digital asset must trade on an Eligible Digital Asset Trading Platform,[17] without withdrawal issues specific to that digital asset;
    • The digital asset must be custodied by a third-party custodian regulated as a federally chartered bank or as a state trust company, that meets additional security practices, insurance requirements, and business practice requirements as determined by the Committee; [18]
    • The digital asset must have no known security vulnerabilities, including critical bugs, undue exposure to 51% attacks, or other factors, as determined by the Committee;
    • The digital asset must not face undue risk of being deemed a security under U.S. federal securities laws in the opinion of the Committee, given present knowable facts and circumstances; [19]
    • The digital asset must have traded more than 1% of its free-float-adjusted market capitalization on eligible trading venues over the past 30 days; and ( print page 95855)
    • The digital asset must have maintained a unit price greater than $0.01 for the past 30 consecutive days.

    The Index is reconstituted on a monthly basis at 4:00 p.m. E.T. on the last Business Day of each month. As of October 31, 2024, the Index included the following digital assets, and their weights were as follows: [20]

    Digital asset Weight (%)
    Bitcoin 75.14
    Ethereum 16.42
    Solana 4.30
    XRP 1.56
    Cardano 0.66
    Avalanche 0.55
    Chainlink 0.39
    Bitcoin Cash 0.38
    Uniswap 0.31
    Polkadot 0.30

Document Information

Published:
12/03/2024
Department:
Securities and Exchange Commission
Entry Type:
Notice
Document Number:
2024-28343
Pages:
95853-95865 (13 pages)
Docket Numbers:
Release No. 34-101775, File No. SR-NYSEARCA-2024-98
PDF File:
2024-28343.pdf