On 30 January 2025, the United States Securities and Exchange Commission (US SEC) granted accelerated approval to a proposed rule change filed by NYSE Arca, Inc. This approval permits the exchange to list and trade shares of the Bitwise Bitcoin and Ethereum ETF under NYSE Arca Rule 8.201-E, which governs Commodity-Based Trust Shares. The decision follows an Amendment No. 1 to the original proposal, ensuring compliance with US securities regulations and aligning with previous approvals of similar exchange-traded products (ETPs).
The order, published as Release No. 34-102310, outlines the regulatory framework under which NYSE Arca will list and trade shares of the Bitwise Bitcoin and Ethereum ETF (Trust). The ETF will hold both spot bitcoin and spot ether, with asset allocation based on the relative market capitalisation of both cryptocurrencies. The Bitwise Bitcoin and Ethereum ETF’s objective is to provide investors with exposure to bitcoin and ether’s market value while managing operational expenses.
The Bitwise Bitcoin and Ethereum ETF’s assets will consist solely of bitcoin, ether, and cash. Its net asset value (NAV) will be calculated daily based on benchmark pricing indices. The ETF will operate as a cash-only creation and redemption model, meaning that shares will be issued and redeemed in exchange for cash rather than direct cryptocurrency transfers.
NYSE Arca’s original rule change proposal was filed with the US SEC on 26 November 2024 and was published in the Federal Register on 16 December 2024 for public comment. On 21 January 2025, the exchange filed Amendment No. 1, providing additional details on the Trust’s structure, asset allocation, pricing mechanisms, and compliance measures. The US SEC reviewed these submissions and granted accelerated approval, citing alignment with previous approvals for spot bitcoin and ether ETPs. The approval is consistent with Section 6(b)(5) of the United States Securities Exchange Act of 1934, which requires exchanges to prevent fraudulent and manipulative acts and protect investors.
The approval requires the ETF to comply with several regulatory conditions to ensure market integrity. The ETF’s bitcoin and ether holdings will be priced using the CME CF Bitcoin – New York Variant and CME CF Ether – Dollar Reference Rate – New York Variant benchmarks. Coinbase Custody Trust Company, LLC will serve as the custodian for bitcoin and ether holdings, while the Bank of New York Mellon will oversee cash holdings, administration, and transfer agency services. The ETF will also be subject to NYSE Arca’s existing trading rules to prevent fraud and market manipulation.
The US SEC justified the accelerated approval by stating that the proposal aligns with prior approvals for spot cryptocurrency ETPs. The commission concluded that NYSE Arca’s proposal met the necessary requirements, particularly regarding investor protection, fair trading practices, and regulatory oversight. The listing and trading of Bitwise Bitcoin and Ethereum ETF shares on NYSE Arca is now set to proceed, pending final operational steps by the exchange and fund issuer.
(Source: https://www.sec.gov/files/rules/sro/nysearca/2025/34-102310.pdf)
