Bitwise, a cryptocurrency asset management firm, is enhancing transparency for its Bitcoin and Ether ETFs by implementing daily verification of on-chain holdings through the accounting firm The Network Firm. This shift from publicly listed wallet addresses aims to improve investor confidence in fund balances and liabilities.
Key Points:
- Bitwise is introducing third-party proof-of-reserves verifications for its Bitcoin and Ether ETFs.
- The new process involves daily verification of holdings on the blockchain and reconciling these with the number of outstanding fund shares, moving away from previous practices of listing wallet addresses online.
- A second level of transparency will be added in the future with CPA-attested reports confirming both asset balances and fund liabilities.
The firm stated, “Together, these features deliver a more comprehensive and easily readable approach to transparency.” This initiative follows growing trends in cryptocurrency to provide proof-of-reserves, especially in the wake of industry disruptions caused by events like the FTX collapse in late 2022.
Bitwise’s Bitcoin ETF currently manages approximately $4.9 billion in assets, trailing behind the market-leading BlackRock’s iShares Bitcoin Trust, which oversees $85.9 billion in net assets. Its Ethereum ETF manages about $358 million, significantly less than the sector leader’s $6.28 billion.
