SEC Greenlights Bitwise Chainlink Spot ETF for NYSE Trading

Bitwise has received approval from regulators to introduce a Chainlink exchange-traded fund (ETF) in the United States. This significant step marks progress in the availability of regulated cryptocurrency investment products. The new ETF will be listed on NYSE Arca under the ticker symbol CLNK, enabling investors to gain direct price exposure to Chainlink’s token, LINK, through a traditional market framework, eliminating the necessity for them to manage or hold the underlying asset.

Key Takeaways

Regulatory Approval: The SEC has authorized Bitwise's Chainlink ETF, broadening investment opportunities beyond just Bitcoin and Ethereum.
No Direct Ownership: Investors can now track Chainlink’s price without needing to own LINK directly.
Fee Structure: Bitwise is waiving management fees for the fund's first three months, after which a 0.34% annual fee will apply.
Market Reaction: Following the announcement, LINK's price rose over 6%, with significant trading volume increases.
Growing ETF Market: This fund is the second U.S.-listed ETF for Chainlink, alongside Grayscale's GLNK.

Chainlink LINK

SEC Approval Opens New Investment Opportunities

With this regulatory approval, the Bitwise Chainlink ETF allows investors to monitor Chainlink's price movements without the need for direct ownership of LINK. The approval is a result of Bitwise's completion of the mandatory Form 8-A registration with the SEC. Currently, the firm manages around $15 billion in assets related to cryptocurrency.

This latest approval reflects a broader acceptance of spot cryptocurrency ETFs in the U.S. market, which is expanding investor access beyond Bitcoin and Ethereum to include selected altcoins.

Fund Fee Structure and Setup Details

To promote early adoption of the ETF, Bitwise has decided to waive management fees for the first three months or until the fund's assets reach $500 million. After this initial phase, a management fee of 0.34% per year will be implemented, which is comparable to fees of similar crypto investment products.

The fund commenced with an initial investment of $2.5 million. Coinbase Custody will manage the LINK assets, while BNY will provide cash custody services, ensuring a robust and institutional-grade infrastructure.

Moreover, Bitwise has mentioned that they might explore staking opportunities in the future. While there is no set date for this enhancement, they have identified Attestant Ltd. as the preferred staking provider if it proceeds.

Market Response to ETF Approval

In the wake of the ETF approval announcement, LINK experienced a notable uptick in market activity. The token increased by more than 6% within a 24-hour span, accompanied by a nearly 80% rise in trading volume, indicating a resurgence of trader interest.

Metrics supporting derivatives activity showed a rise in futures open interest to about $665 million, suggesting that new capital is entering the market rather than just speculative trades.

LINK chart | CoinMarketCap

Analyst Ali Martinez shared on X that LINK might target $14.63, the upper limit of its current trading range, noting that there seems to be no substantial resistance preventing this rise.

Positioning of the Bitwise Chainlink ETF

The Bitwise ETF is now the second spot ETF linked to Chainlink available in the U.S. This follows the recent transformation of Grayscale’s Chainlink Trust into a spot ETF, now trading under the symbol GLNK. Since its approval last month, GLNK has attracted $87.5 million in assets, based on available data.

Together, these developments underscore the expanding diversity of regulated avenues for LINK exposure in the U.S. markets.

Disclaimer: This content is for informational purposes only and should not be interpreted as financial advice. The views expressed in this article may reflect the author's personal opinions and do not represent The Crypto Basic's stance. Readers are encouraged to conduct their own research before making any investment decisions. The Crypto Basic holds no responsibility for any financial losses.