Bitwise to donate 10% of spot Ethereum ETF profits to open-source developers

Bitwise’s ETHW is among several spot Ethereum ETH +0.65% exchange-traded funds set to begin trading in the U.S. on Tuesday, with the crypto asset manager announcing that 10% of profits from the ETF will be donated to Ethereum developers.

The donations will be split between two organizations, according to a statement : Protocol Guild and PBS Foundation. Protocol Guild is a grassroots funding organization that supports over 170 core contributors dedicated to research and development of Ethereum. PBS Foundation is a non-profit organization that funds open-source Ethereum block relays and associated research.

“Ethereum, as an open-source technology, is maintained by a dedicated community of open-source developers,” Bitwise Chief Technology Officer Hong Kim said. “Every investor in ETHW wants Ethereum to continue to advance, and this donation program contributes to that goal.”

Bitwise’s ETHW will trade on the NYSE, with Coinbase selected as its digital asset custodian. The fund has a management fee of 0.2%, reduced to 0% for six months on the first $500 million in assets.

The move follows a similar initiative in January after the launch of Bitwise’s BITB spot Bitcoin ETF. Bitwise is also donating 10% of BITB profits to three non-profit organizations that fund Bitcoin open-source development: Brink, OpenSats and the Human Rights Foundation’s Bitcoin Development Fund, with donations made annually for at least the next ten years.

In an effort to foster transparency, Bitwise previously published its Bitcoin addresses for its ETF holdings and confirmed it will also disclose its Ethereum addresses for all ETHW holdings on Monday.

Spot Ethereum ETFs get final sign-off to begin trading Tuesday

Registration statements became effective Monday for firms vying for a spot Ethereum ETF — marking the final sign-off for those products to begin trading today.  

The U.S. Securities and Exchange Commission allowed registration forms from 21Shares, Bitwise , BlackRock , Fidelity , Franklin Templeton , VanEck and Invesco  to go effective as of Monday afternoon. Registration forms for the Grayscale Ethereum Trust and the Grayscale Ethereum Mini Trust also went effective on Monday. 

Bitwise’s ETHW is launching around six months after its BITB product, which has generated over $2.2 billion in net inflows, with $2.7 billion in assets under management.

“Bitcoin ETPs started a new ballgame for crypto; the launch of spot ether ETPs moves us to the second inning,” Bitwise CIO Matt Hougan said. “Making bitcoin available in an exchange-traded format brought more than $17 billion of new investment into crypto in a matter of months. We think this launch will extend that run with billions more and drive ether to new all-time highs in 2024.”

“Bitcoin and ether have different strengths, different use cases, and different fundamental drivers, so investors are apt to have them assume different roles in a portfolio,” Hougan added. “Whereas bitcoin is a monetary asset with a role similar to alternatives, ether plays more like a high-growth tech stock. By powering crypto’s ‘killer apps’ like DeFi, NFTs, and stablecoins, ether provides exposure to the most disruptive capabilities of blockchains. We’re excited to offer ETHW as a way for investors to gain greater access to crypto’s potential.”

Hougan recently estimated U.S. spot Ethereum ETFs could attract $15 billion worth of net inflows in their first 18 months, predicting the demand could push ether prices to all-time highs above $5,000 by year-end.