Ben Strack

The SEC has OK’d nine more WisdomTree blockchain-enabled funds as the asset manager gets set to roll them out on its mobile app in the coming months.



WisdomTree’s funds are the latest step toward the asset manager’s goal to bring fixed income, equities and commodities into the digital world through funds and tokenized exposures.&nbsp;



The new products do not invest in crypto. However, the funds’ transfer agent, Securrency Transfers, maintains a secondary record of share ownership on the Stellar or Ethereum blockchains — hence “blockchain-enabled.” Securrency keeps the primary record of share ownership for the funds in “its own books-and-records,” a spokesperson told Blockworks.



Among the new offerings are funds that invest in US Treasurys. The firm has also gained approval for the WisdomTree 500 Digital Fund — its first digital fund seeking to track performance in the US equity market.



Each fund is set to be available only via the <a href="https://blockworks.co/news/wisdomtree-launching-crypto-app" target="_blank" rel="noreferrer noopener">WisdomTree Prime</a> mobile application, which is in beta testing and is on track for a national rollout next quarter.&nbsp;



End users won’t be able to verify their ownership themselves without the app, say via the Ethereum or Stellar blockchain directly. But the firm believes the secondary record provides its funds with the potential to unlock use cases for these assets.&nbsp;



Will Peck, WisdomTree’s head of digital assets, told Blockworks there may be distribution opportunities in the future, saying:



“We believe that blockchain-enabled finance has the potential to improve the investor experience through enhanced liquidity, transparency and standardization, which we aim to achieve over time, and these nine digital funds are setting the foundation as we seek to bridge the gap between traditional finance and digital finance today.”



Though Peck declined to comment on future products, he told Blockworks in an email that&nbsp;WisdomTree Prime intends to offer “a highly curated experience” for investors that brings mainstream exposures to the blockchain.&nbsp;



“With this in mind, we are continuously evaluating what types of products would complement one another and contribute to this strategically designed suite of product offerings, he added.



WisdomTree has roughly $81 billion in assets under management. A majority of those assets are in its 78 ETFs trading in the US, according to ETF.com.&nbsp;



<h3>WisdomTree finds crypto interesting but more into blockchain</h3>



The news comes after the firm gained SEC approval to <a href="https://blockworks.co/wisdomtree-set-to-launch-fund-with-real-world-focus" target="_blank" rel="noreferrer noopener">launch its Short-Term Treasury Digital Fund</a> in September.&nbsp;



That fund, which invests in short-term US Treasury obligations, is also set to digitize its fund share ownership record on the Ethereum or Stellar blockchains.



<a href="https://blockworks.co/news/wisdomtree-triples-down-on-future-blockchain-focus" target="_blank" rel="noreferrer noopener">WisdomTree executives said</a> during the company’s earnings call in October that blockchain-enabled digital wrappers are the future of asset management.&nbsp;



CEO Jonathan Steinberg said at the time that the company has so far spent about $20 million on its tokenization and WisdomTree Prime efforts.&nbsp;The firm, for example, is building out the app’s ability to initially allow users to transfer tokenized assets such as dollars, gold, Treasurys, bitcoin and ether.



“Crypto’s interesting, but the real opportunity is blockchain-enabled finance,” WisdomTree Chief Operating Officer Jarrett Lilien added during the call. “It’s a mistake to confuse crypto, which is a use case for the blockchain…with the broader opportunity we’re pursuing.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

WisdomTree’s Latest ‘Blockchain-Enabled’ Funds To Use Ethereum, Stellar

<div id="highlights-block_635c075561fb9" class="highlights">
 <ul>
 <li>“It’s a mistake to confuse crypto, which is a use case for the blockchain…with the broader opportunity we&#8217;re pursuing,” WisdomTree COO says</li>
 <li>The firm gained approval last month for a fund that digitizes its share ownership record on the blockchain, and has filed for nine more</li>
 </ul>
 
</div>



WisdomTree executives went as far as to say blockchain-enabled digital wrappers are the future of asset management — while the ETF-focused fund group gets set to roll out its digital assets consumer app in the first quarter of 2023.



The company’s leaders on Friday doubled down on its shift to a focus on digital assets during WisdomTree’s earnings call, reiterating its goal to bring fixed income, equities and commodities into the digital world through blockchain-enabled funds and tokenized exposures.



“Crypto’s interesting, but the real opportunity is blockchain-enabled finance,” Chief Operating Officer Jarrett Lilien said during the call. “It’s a mistake to confuse crypto, which is a use case for the blockchain…with the broader opportunity we&#8217;re pursuing.”



CEO Jonathan Steinberg said that in addition to dropping “Investments” from its name, the company would change its ticker from WETF to WT.&nbsp;



Though the company has 78 ETFs trading in the US with roughly $52 billion in assets under management, according to ETF.com, the CEO said the adjustments were “a nod toward our natural evolution and history of innovation” as the company looks to expand.



The company’s assets under management dropped to about $71 billion in the third quarter — down 4.6% from the second quarter — due to market depreciation. It has since rebounded to nearly $75 billion, in part due to $1.8 billion in October net inflows.&nbsp;



Its cryptoassets under management rose slightly from $151 million, as of June 30, to $163 million at the end of the third quarter. Net flows in the segment, which totaled $41 million in 2022, as of Sept. 30, were flat last quarter.



The company posted adjusted earnings per share of $0.06, which was in line with estimates. WisdomTree’s stock price, which is down about 16% year to date, was down 1.5% on the day at 12:30 pm ET.&nbsp;



<h3>Blockchain-focused product development</h3>



Executives said during the call that the company’s <a href="https://cms.blockworks.co/wisdomtree-launching-crypto-app/" target="_blank" rel="noreferrer noopener">blockchain-native financial services mobile app</a>, WisdomTree Prime, is in beta testing and is on track for a national rollout by the end of the first quarter of 2023.



WisdomTree CEO Jonathan Steinberg said the company has so far spent roughly $20 million on its tokenization and WisdomTree Prime efforts. The company’s leaders declined to comment on the app’s number of beta users or transaction volumes so far.



The firm also gained SEC approval <a href="https://cms.blockworks.co/wisdomtree-set-to-launch-fund-with-real-world-focus/" target="_blank" rel="noreferrer noopener">to launch its Short-Term Treasury Digital Fund</a> last month — an offering that digitizes its fund share ownership record on the Ethereum or Stellar blockchains. Executives have said the fund is a first step toward bringing traditional financial assets into the digital ecosystem and allowing blockchain rails to improve investor experience, such as through near-instant settlement finality.



WisdomTree has filed for nine additional funds to be part of a blockchain-enabled fund suite that includes fixed income and equity strategies, executives revealed.&nbsp;



Such offerings are expected to only be available via WisdomTree Prime initially, according to Will Peck, the firm’s head of digital assets.&nbsp;



<h3>Journey to a US spot bitcoin ETF</h3>



WisdomTree’s proposed US spot bitcoin ETF was rejected by the SEC last month, a familiar outcome for all asset managers who have sought to bring such a product to market.&nbsp;



Grayscale Investments is <a href="https://cms.blockworks.co/grayscale-lawsuit-moves-forward-as-gbtc-discount-widens/" target="_blank" rel="noreferrer noopener">moving forward with suing the SEC</a> for denying the company’s proposal to convert its Bitcoin Trust (GBTC) to an ETF. 



Peck said Friday that the firm has no plans to join Grayscale’s lawsuit, adding WisdomTree would instead look to “work productively” with the SEC.&nbsp;



“We know that regulatory concerns take time to address, and appreciate the due diligence in doing so,” Peck previously told Blockworks. “We acknowledge that this is a slow-moving process, and we aren’t letting that stop us from innovating in other ways in the meantime.”&nbsp;



The company offers crypto ETPs, including a spot bitcoin product, in Europe.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

WisdomTree Triples Down on Future Blockchain Focus

Ornella Hernandez

<div id="highlights-block_6346fc4bce481" class="highlights">
 <ul>
 <li>The rejection was “discriminatory and unreasoned,” Grayscale claims in its brief</li>
 <li>SEC also rejects WisdomTree&#8217;s spot bitcoin ETF for second time</li>
 </ul>
 
</div>



In the latest regulatory twist around crypto’s long-pined-for, market-ready spot ETF products, Grayscale Investments has appealed the SEC’s move to deny converting the firm’s bitcoin trust to a spot ETF.



The Digital Currency Group (DCG) subsidiary claims that 850,000 Americans own GBTC and that it’s past time that the SEC approves a US spot bitcoin ETF.



The SEC initially rejected the digital currency asset manager’s application on June 29 for failing to meet the required standard to prevent fraud and manipulation, <a href="https://www.sec.gov/rules/sro/nysearca/2022/34-95180.pdf" target="_blank" rel="noreferrer noopener">the SEC said</a>. Grayscale consequently <a href="https://cms.blockworks.co/grayscale-sues-sec-over-rejection-of-proposed-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">sued the SEC and filed a petition to review the decision</a> the same day.



A number of industry participants, however, have been skeptical, <a href="https://cms.blockworks.co/grayscale-faces-uphill-battle-with-lawsuit-against-sec/">saying</a> the case would be hard to win, as regulators have shown no signs of granting the same permissions to spot bitcoin ETFs as they have futures products. 



Grayscale <a href="https://grayscale.com/wp-content/uploads/2022/10/GBTC-Lawsuit-Grayscale-Opening-Brief.pdf" target="_blank" rel="noreferrer noopener">said</a> in the legal brief that the decision was “discriminatory and unreasoned.” It added that the SEC “failing to justify its vastly different treatment of bitcoin futures ETPs and spot bitcoin ETPs” ultimately harms the 850,000 investors who own shares in the trust.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We’ve filed the opening brief in our lawsuit against the SEC, challenging their decision to deny our application to convert <a href="https://twitter.com/search?q=%24GBTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$GBTC</a> to a spot Bitcoin ETF. A “brief” thread:&mdash; Grayscale (@Grayscale) <a href="https://twitter.com/Grayscale/status/1579989744477671425?ref_src=twsrc%5Etfw">October 12, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Grayscale’s main argument is that the SEC has previously approved several bitcoin futures ETFs but continues to reject proposed ETFs that would hold bitcoin directly — a move the asset manager says would give investors relatively risk-free exposure, considering buyers would not have to custody the underlying digital assets outright.



The brief also highlights that bitcoin futures and spot bitcoin both generate their price based on overlapping indexes.



The SEC must submit its brief by Nov. 9, according to Grayscale, which will then reply by Nov. 30. Both parties are set to file final versions by Dec. 21.



Grayscale’s filing came the same day that the SEC rejected a proposed rule change that would have given the go-ahead to ETF specialist WisdomTree to list and trade shares of its planned bitcoin trust on the Cboe BZX Exchange. It marked WisdomTree’s <a href="https://seekingalpha.com/news/3890457-sec-rejects-wisdomtrees-spot-bitcoin-etf-for-second-time" target="_blank" rel="noreferrer noopener">second attempt</a> to launch a spot bitcoin ETF.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

Grayscale Fires Back at SEC’s Veto of Spot Bitcoin ETF

<div id="highlights-block_633364b6a6a01" class="highlights">
 <ul>
 <li>Fund’s share ownership record lives on either the Stellar or Ethereum blockchains</li>
 <li>The offering is expected to launch through WisdomTree Prime’s digital wallet application in the coming months</li>
 </ul>
 
</div>



A key narrative in the long-term bullish case for crypto adoption is the prospect of tokenizing off-chain assets to enable more efficient global markets.



In that vein, WisdomTree is set to launch a fund that digitizes its fund share ownership record on the Ethereum or Stellar blockchains as the asset manager seeks to ultimately move more traditional financial assets onto digital rails.&nbsp;&nbsp;



Regulators have approved WisdomTree’s Short-Term Treasury Digital Fund (WTSY), the firm has revealed, which seeks to track the <a href="https://www.wisdomtree.com/blog/glossary#solactive%201-3%20year%20treasury%20bond%20index" target="_blank" rel="noreferrer noopener">Solactive 1-3 Year Treasury Bond Index</a> by investing in short-term US Treasury obligations.



The fund does not invest in crypto directly. But the asset manager is betting that the offering is a first step toward bringing traditional financial assets, like US Treasury bonds, into the digital ecosystem and unlocking ways for blockchain rails to improve investor experience.



WisdomTree, with roughly $75 billion in assets under management, first <a href="https://www.sec.gov/Archives/edgar/data/1859001/000119312521136968/d156395dn1a.htm" target="_blank" rel="noreferrer noopener">filed</a> for the fund in April 2021. An open-ended registered fund under the Investment Act of 1940, WTSY is like a traditional mutual fund. Where it differs is that its transfer agent — Securrency Transfers — keeps a secondary record of the fund’s share ownership on either the Stellar or Ethereum blockchains.



Though the WisdomTree fund cannot support anonymous transactions, an investor would be able to make an approved transaction on their own and hold the record of the share in a supported blockchain wallet, Will Peck, WisdomTree’s head of digital assets, said in <a href="https://www.wisdomtree.com/blog/2022-09-26/wtsy-the-digital-fund-opportunity" target="_blank" rel="noreferrer noopener">a Monday blog post</a>.&nbsp;



Peck highlighted near-instant settlement finality around the clock and atomic settlement that a blockchain provides, as well as the code-based enforcement of rules in financial processes.&nbsp;



“These features will take time to unlock and may not come to fruition with respect to the fund, but we are seeking to get there,” he said.



Peck called WTSY the first digital-registered fund with multichain interoperability. He added that bridging the gap between traditional finance and blockchain is a critical step in improving the investor experience over time.&nbsp;



<blockquote class="wp-block-quote">“Many of the world’s biggest financial institutions agree that there is a growing movement to make tokenized assets and digital funds a part of day-to-day ‘traditional’ financial services,” Peck told Blockworks.</blockquote>



“We’re truly an early mover here in the registered fund space, and we think our multichain functionality enables a lot of these use cases,” he said.



Nicole Olson, a vice president of digital product development and innovation at State Street Digital, <a href="https://cms.blockworks.co/state-street-sees-significant-opportunity-in-tokenization/" target="_blank" rel="noreferrer noopener">told Blockworks last month</a> that tokenization is among the company’s biggest focuses.&nbsp;



Sumit Roy, crypto editor and analyst for ETF.com, previously told Blockworks that the WisdomTree fund shares record being available on the blockchain is “a glimpse of the future.” Though it’s conceivable for a fund shares’ official record to live on the blockchain one day — allowing investors to trade their shares peer-to-peer — there are regulatory hurdles to get past first, he added.&nbsp;



The fund is expected to launch through WisdomTree Prime’s digital wallet application, which is currently in beta testing.&nbsp;



The company <a href="https://cms.blockworks.co/wisdomtree-launching-crypto-app/" target="_blank" rel="noreferrer noopener">first revealed plans for</a> the app in January. WisdomTree Prime is designed to allow users to save, spend and invest in cryptoassets such as bitcoin and ether, blockchain-enabled funds and tokenized versions of physical assets.



WisdomTree CEO Jonathan Steinberg has said <a href="https://cms.blockworks.co/wisdomtree-sees-opening-in-crypto-winter/" target="_blank" rel="noreferrer noopener">he expects</a> all financial assets to eventually move onto blockchain infrastructure, and that he intends for the company to be <a href="https://cms.blockworks.co/wisdomtree-ceo-we-will-be-first-to-bring-passive-investing-to-the-blockchain/" target="_blank" rel="noreferrer noopener">a leader in that segment</a>.&nbsp;



Peck declined to comment on specific digital product plans going forward.



“We have said in the past that we want to be a leader in passive investing on blockchain,” he said. “We have strong indexing and research capabilities across asset classes, and we look forward to future product development in this wrapper.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

WisdomTree Set To Launch Digital Fund With Real-world Focus

<div id="highlights-block_628be970c94f4" class="highlights">
 <ul>
 <li>WisdomTree envisions its mobile app to be an alternative to JPMorgan or Charles Schwab accounts</li>
 <li>Asset manager aims to continue building diversified crypto products for institutional investors in Europe</li>
 </ul>
 
</div>



As WisdomTree gets set to launch <a href="https://www.googleadservices.com/pagead/aclk?sa=L&amp;ai=CMBXKkvGLYqT2K_nsj-8Pn4G3wA_kx5SYaovcqYa5D5X1kZTBLggAEAEguVRgyYb_h_Cj7BKgAenQ27AoyAEByAPYIKoEXk_QuQJDELS0mk9ko4jrzpCaVL0F1O0igdYsup_M-h7jlbUugCOsUTBkKJUtlDXgxusXwO-8VJNlDm_DUiKLZFttWJgvtpvInttmmYVFJwWA12WN9sjQL-Fmhx8cCJ7ABMeSrrzpA4AFkE6IBcWl_9g7oAZmgAfpiKyQA4gHAZAHAagHpr4bqAe5mrECqAfz0RuoB-7SG6gH_5yxAqgHytwbqAfYprECoAiv0qYEsAgB0ggMEAIghAEyAoJAOgEAmgkfaHR0cHM6Ly93d3cud2lzZG9tdHJlZXByaW1lLmNvbbEJoC5PRNQ1pIO5CaAuT0TUNaSD-AkBmAsBqgwCCAG4DAHoDAaCFBQIAhIQd2lzZG9tdHJlZSBwcmltZYgUAsgU6YK8qdzzvLpy0BUB-BYBgBcBkhcJEgcIARADGPIB&amp;ae=2&amp;ved=2ahUKEwjy_ez2vfb3AhWPlnIEHXG9ApoQ0Qx6BAgCEAE&amp;dct=1&amp;cid=CAASFORoEgcD0OzC5In3NNWXW-LyT3iO&amp;dblrd=1&amp;sival=AF15MECIGMVfVt9uzWR4E_Fuq5K19FziuP0jUNOncwmPaU6zthq4VJLKhqfN0RTa0ZUx--t8UpgwcdveNWoeUFaaXGBwUr1xYo6Yo2Yuve626kxUNNiG-v_06Dt7WpT-_7YXzRcr5BqN_k3l6KHoaBTQZFO04yCzYEzup74QW4yKqfWr0vH3uTwyXWRe8R8YMcbdc9LZ3BP2&amp;sig=AOD64_01UFM1BNlk__iP9WGTxSQNQiRVlg&amp;adurl=https://www.wisdomtreeprime.com%3Futm_source%3DGoogle%26utm_medium%3DPaid%26utm_campaign%3DBrandSearch%26utm_content%3D2" target="_blank" rel="noreferrer noopener">a mobile app</a> allowing users to hold tokenized assets, the company’s product head for digital assets said such an offering could serve as a catalyst for the finance sector to have its “internet moment.”



Jason Guthrie, who worked at Macquarie Group and Deutsche Bank before joining WisdomTree in 2017, told Blockworks during the <a href="https://cms.blockworks.co/events/permissionless-livestream/" target="_blank" rel="noreferrer noopener">Permissionless event</a> in Palm Beach last week that financial services companies have not yet dramatically changed their business models amid digitalization in the space.



“I don’t think financial services had its internet moment,” he said. “It’s not like it’s Facebook disturbing advertising or Netflix disturbing television. These were huge disruptive, revelatory uses of that technology, and finance hasn’t got it.”



Called WisdomTree Prime, the company’s upcoming offering — <a href="https://cms.blockworks.co/wisdomtree-launching-crypto-app/" target="_blank" rel="noreferrer noopener">first announced in January</a> — seeks to provide a traditional finance experience built on decentralized finance principles. The asset manager is looking to move the app into beta testing at the end of this quarter and roll it out nationally later this year.&nbsp;



The app will initially allow users to transfer tokenized assets such as dollars, gold, Treasurys, bitcoin and ether, Guthrie revealed. It then seeks to bring fixed income and equities by the second quarter of next year.&nbsp;



Transferring value through these assets would be nearly instant. The app would also offer customer support, such as private key recovery.



“We want to add these experiences that make [digital assets] usable in the real world,” he said.



The estimated 200 million people involved in crypto today will continue to drive innovation in the space, Guthrie added, but usability has been a barrier to entry for the larger market.



“I care about the two billion people that are going to come on next,” he said. “How can we get them to pick a service like WisdomTree Prime instead of their JPMorgan or Schwab brokerage account?”



<h3>Diversification will be key</h3>



WisdomTree is also seeking to continue building diversified crypto products for institutional investors in Europe. The company launched <a href="https://cms.blockworks.co/wisdomtree-unveils-3-new-crypto-etps-as-investors-seek-diversity/" target="_blank" rel="noreferrer noopener">Solana, Cardano and Polkadot ETPs</a> on various European exchanges in March.



Institutional adoption, while slow, has “a huge amount of potential,” Guthrie said, as many family offices, hedge funds, asset managers, private banks, pensions and endowments engage with the company about the space.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



“The biggest problem for institutional adoption is that those institutions need to be able to adequately explain what they’re putting the client money into,” Guthrie explained. “So you’re educating them on how to educate clients.”



Guthrie noted the parallels between crypto adoption and the adoption of ETFs about 15 years ago. The ETF wrapper was something institutions had to learn about and come to grips with as clients were already comfortable with mutual funds.&nbsp;



“It’s the same thing here,” he said. “We’ve got this brand new way of doing things — this time it’s an asset class — but you can see they’re trying to get their internal processes comfortable with how they will communicate it with clients.”



In terms of new products, WisdomTree is focused on three segments: DeFi, the metaverse and layer-1s that compete with Ethereum. It is also actively working on how to fuse innovations within the space into the products, such as passing along staking yields to investors.&nbsp;



“We all know diversification is the only free lunch in investing,” Guthrie said. “Those that can bring a thoughtful and risk-managed approach to that are going to be the ultimate winners, and that’s what we’re trying to do.”



As for non-diversified products, WisdomTree is also one of many asset managers that has filed for a spot bitcoin ETF. The company <a href="https://cms.blockworks.co/wisdomtree-amends-bitcoin-etf-application/" target="_blank" rel="noreferrer noopener">amended its application</a> for the fund in December — a week after the SEC rejected its proposal — and expects a decision in the coming months.&nbsp;



Guthrie said he does not expect the agency to approve a spot bitcoin ETF this year.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

WisdomTree Seeks To Spur Finance’s ‘Internet Moment’

<div id="highlights-block_626c15910dc19" class="highlights">
 <ul>
 <li>Firm is set to launch its blockchain-native financial services app, WisdomTree Prime, later this year</li>
 <li>CEO Jonathan Steinberg said having a mobile financial app will be “table stakes” in 2023</li>
 </ul>
 
</div>



WisdomTree will be the first asset manager to bring passive investing to the blockchain, the company’s CEO said, doubling down on past statements about the firm’s bullishness on the crypto space.&nbsp;



The fund group eclipsed $80 billion in assets under management for the first time this month, executives said during a Friday earnings call. It plans to roll out its blockchain-native financial services mobile app, <a href="https://cms.blockworks.co/wisdomtree-launching-crypto-app/" target="_blank" rel="noreferrer noopener">WisdomTree Prime</a>, later this year.



Jonathan Steinberg noted the importance of being a first-mover, noting Vanguard’s pioneering of passive investing within the mutual fund wrapper and BlackRock’s iShares creating the first comprehensive passive suite of ETFs.



Vanguard manages about $8 trillion in assets, and BlackRock, the world’s largest asset manager, has more than $2 trillion within its nearly 400 US ETFs alone.



Steinberg said that virtually all financial assets, through tokenization, will eventually come to the blockchain. WisdomTree Prime is set to allow users to save, spend and invest in cryptoassets, such as bitcoin and ether, blockchain-enabled funds and tokenized versions of physical assets such as gold.



Companies that don’t adapt to the changing financial services landscape could resemble newspaper groups that failed to harness the power of the internet, he added, or camera companies that were replaced by smartphones.



“There will be spectacular winners and many who get disrupted and disintermediated out,” the CEO explained. “It is easy to envision a world where many of today’s leading financial services companies look like yesterday’s newspaper groups.”



WisdomTree is set to launch the beta testing of its new app during the second quarter.&nbsp;



Steinberg said having a mobile financial app will be “table stakes” in 2023. He noted that some investors will likely use WisdomTree Prime as a neo-bank, while others will use it as a registered investment advisor (RIA) of sorts.&nbsp;



“Regardless of how different consumers use it…by being first in tokenizing the underlying exposures and by being native to the blockchain in our design, WisdomTree will deliver unique and better functionality,” he said. “Nothing can potentially scale faster than a successful mobile app.”&nbsp;



<h3>A glimpse at future products</h3>



Will Peck, WisdomTree’s head of digital assets, told Blockworks the company intends to launch more products in Europe, as well as enhance existing ones. He declined to comment on specifics.



WisdomTree <a href="https://cms.blockworks.co/wisdomtree-unveils-3-new-crypto-etps-as-investors-seek-diversity/" target="_blank" rel="noreferrer noopener">added Solana, Cardano and Polkadot ETPs</a> to various exchanges across the continent last month.



In the US, WisdomTree is one of many asset managers to file for a spot bitcoin ETF. The company <a href="https://cms.blockworks.co/wisdomtree-amends-bitcoin-etf-application/" target="_blank" rel="noreferrer noopener">amended its application</a> for the fund in December, a week after the SEC rejected its proposal.  



Industry executives remain unsure when the agency could approve a spot bitcoin ETF, though <a href="https://cms.blockworks.co/crypto-execs-read-the-tea-leaves-on-spot-bitcoin-etf-approval/" target="_blank" rel="noreferrer noopener">most believe</a> one won’t launch until 2023 at the earliest. 



The firm also <a href="https://www.sec.gov/Archives/edgar/data/1859001/000119312521136968/d156395dn1a.htm" target="_blank" rel="noreferrer noopener">filed</a> in April 2021 to launch a Digital Short-Term Treasury Fund, which would have a record of share ownership digitized on the blockchain. The following month it revealed plans to launch an Ethereum trust.



While the outlook for a bitcoin ETF in the US remains “muted,” Jarrett Lilien, WisdomTree president and COO, said during the Friday earnings call, <a href="https://cms.blockworks.co/wisdomtree-and-ritholtz-wealth-management-launch-crypto-index/" target="_blank" rel="noreferrer noopener">the firm launched</a> a separately managed account (SMA) strategy for the US wealth channel.



“Consider that there are $30 trillion in assets in the US wealth channel alone,” Lilien said. “So even a 1% allocation to crypto in just the US would yield a $300 billion market opportunity for crypto exposures, and the realistic opportunity to be multiples of that.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

WisdomTree CEO: We Will Be First to Bring Passive Investing to the Blockchain

<div id="highlights-block_6245bc6c12fa3" class="highlights">
 <ul>
 <li>Launches on exchanges across Europe come as the firm seeks to offer a more robust toolkit to institutional investors</li>
 <li>WisdomTree is exploring plenty more “very interesting projects,” an executive told Blockworks</li>
 </ul>
 
</div>



Asset manager WisdomTree has added three physically backed crypto ETPs as issuers rush to meet demand from investors looking to diversify their digital asset holdings.



The fund group, which manages roughly $80 billion in assets, this week launched solana, cardano and polkadot ETPs (exchange-traded products). The products began trading on exchanges in Germany and Switzerland on Tuesday and hit Euronext exchanges in Amsterdam and Paris on Thursday.



The trio of ETPs, which can be sold across the European Union, carry an expense ratio of 95 basis points.



Jason Guthrie, the firm’s head of digital assets for Europe, told Blockworks its client base on the continent is composed entirely of institutional investors.



“It’s not that you get a handful of clients or one big client saying, ‘I really want cardano or polkadot’ specifically, but rather there is this increasing appetite for an ever-expanding product set,” Guthrie said. “The ability for people to respond to market situations, to adjust their portfolio, to have a more robust toolkit I think is by far the loudest message that we get from our client base.”



The market capitalizations of solana (SOL) and cardano (ADA) are roughly $40 billion and $37 billion, respectively — good for sixth- and eighth-highest among cryptocurrencies, according to data compiled by Blockworks. Polkadot (DOT) ranks 11th, at about $25 billion.



WisdomTree now offers eight crypto ETPs. In addition to bitcoin and ethereum products, the company <a href="https://cms.blockworks.co/wisdomtree-launches-spot-etps-in-europe/" target="_blank" rel="noreferrer noopener">launched three crypto basket ETPs</a> in November. The Crypto Market (BLOC), Crypto Altcoins (WALT) and Crypto Mega Cap Equal Weight (MEGA) ETPs were designed to offer blended exposure to blue-chip coins, as well as decentralized finance payments, smart contracts and non-fungible tokens (NFTs).&nbsp;



“While Bitcoin and Ethereum grab the headlines, altcoins are now viable options for many institutional investors, providing more options to diversify their crypto holdings just like they would with any other asset class,” WisdomTree Head of Europe Alexis Marinof said in a statement.



In cherry-picking cryptocurrencies for products, Guthrie said the firm evaluates trading volumes and developer activity, as well as the support it has from exchanges and custodians.&nbsp;



WisdomTree is looking into “plenty of very interesting projects,” he added, noting that future exposures could come in the form of single-asset or basket products. Guthrie did not reveal any specific assets the firm is considering.



Exchange FTX and asset manager CoinShares <a href="https://cms.blockworks.co/coinshares-ftx-team-up-to-launch-solana-etp/" target="_blank" rel="noreferrer noopener">launched</a> the Physical Staked Solana ETP in Germany last week. DeFi Technologies subsidiary Valour launched terra (LUNA) and avalanche (AVAX) ETPs in the country a few days later.



Issuer 21Shares, which has launched a number of crypto ETPs in recent months, plans to have products supporting what the firm considers the top 50 cryptocurrencies by the end of the year, CEO Hany Rashwan <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">told Blockworks</a>.



Guthrie acknowledged the increasing competition in the European crypto ETP space. While it’s important to bring new offerings to market, the executive added, it’s a “balancing act” to ensure the firm maintains a “manageable” product range.



“If you throw too much at the wall, it just becomes confusing to investors,” Guthrie said. “I also think there’s a risk with this space that if you go too far down the list, you can stray into products that are potentially not mature enough yet, are having regulatory issues or have less-established use cases.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

WisdomTree Unveils 3 New Crypto ETPs as Investors Seek Diversity

<div id="highlights-block_6215454be0bb6" class="highlights">
 <ul>
 <li>The index comprises 13 cryptoassets, with bitcoin and ether making up a combined 53%</li>
 <li>Separately managed accounts are the best way to get diversified crypto exposure in the US, WisdomTree CIO says</li>
 </ul>
 
</div>



A crypto index devised by WidsomTree Investments and Ritholtz Wealth Management is set to become more widely available next week as more financial professionals have indicated interest in the space.



The RWM WisdomTree Crypto Index (RTREE) — available via a separately managed account (SMA) — was made available<a href="https://cms.blockworks.co/wisdomtree-and-ritholtz-wealth-management-launch-crypto-index/" target="_blank" rel="noreferrer noopener"> to Ritholtz clients in December</a>.



In the time since, Ritholtz has opened, funded and invested client cash as it fine-tunes operations, according to Michael Batnick, the wealth management firm&#8217;s managing partner.



“There’s a lot that needs to go into making sure that advisers can get comfortable here, because a lot of people are wary of crypto in general,” Batnick told Blockworks. “So, any sort of funkiness or glitch in the matrix and people will get very nervous.”



Roughly 200 advisers have expressed interest in the index, Batnick added. And Ritholtz is in talks with several multibillion-dollar registered investment advisers (RIAs) about the offering.



The index will become available to all advisers on March 1 through Onramp Invest, which supplies the SMA architecture, rebalancing technology and adviser support. Crypto platform Gemini is its custodian.



Ritholtz and WisdomTree will split a fee of 50 basis points from new investors, while Gemini and Onramp will split a one-time transaction fee of 70bps.



WisdomTree Chief Investment Officer Jeremy Schwartz said during a virtual event Tuesday that the index aims to offer exposure to bitcoin and ether, while capturing potential upside in altcoins.



Bitcoin and ether currently account for 36% and 17% of the index, respectively. Allocations to 11 other coins — Terra (LUNA), Uniswap (UNI), Chainlink (LINK), Polygon (MATIC), Decentraland (MANA), Fantom (FTM), The Graph (GRT), Aave (AAVE), Enjin Coin (ENJ), Yearn.finance (YFI) and SushiSwap (SUSHI) — range from 3% to 7%.



<div class="wp-block-image"><figure class="alignleft size-large"><img decoding="async" loading="lazy" width="1024" height="550" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg" alt="" class="wp-image-17731" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=1862 1862w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: WisdomTree</figcaption></figure></div>



The plan is to review exposures monthly. Avalanche (AVAX), which Gemini doesn’t support, is an asset WisdomTree could add in the future, Schwartz said.



<h3>Looking to fill a void</h3>



The launch comes on the heels of financial advisers increasingly looking to invest client funds in crypto. <a href="https://cms.blockworks.co/financial-advisors-bullish-on-crypto/" target="_blank" rel="noreferrer noopener">A survey</a> by Bitwise Asset Management and ETF Trends last month found the percentage of financial professionals investing client funds in crypto rose from 9% to 15% over the past year.



An additional 14% said they will “probably” or “definitely” buy crypto this year, according to <a href="https://static.bitwiseinvestments.com/Research/Bitwise-ETF-Trends-2022-Benchmark-Survey.pdf" target="_blank" rel="noreferrer noopener">the research</a>.



“I believe in holding the underlying but in a package that is very similar to what advisers are used to,” Onramp Invest CEO Tyrone Ross Jr. said during the virtual event. “You shouldn’t be scared or worried about custody or cold wallets or hot wallets or anything like that. Let’s take that away.”



Though WisdomTree <a href="https://cms.blockworks.co/wisdomtree-launches-spot-etps-in-europe/" target="_blank" rel="noreferrer noopener">has launched</a> exchange-traded products (ETPs) that offer diversified crypto exposure in Europe, the SEC <a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">has not yet allowed</a> spot crypto ETFs in the US. Schwartz called bitcoin futures ETFs, which the SEC approved in October, “suboptimal” products.



“We saw…from our experience that the SMA is probably going to be the best structure for a long period of time — for sure if you want this diversified exposure,” Schwartz said.



The index is set to launch as crypto markets have dipped recently. Bitcoin is down about 25% since Ritholtz began testing the index, and some altcoins are down even more.&nbsp;



“Obviously it’s not ideal,” he said. “I wish that it had gone the other way, but by no means does this change how we feel about allocating money here.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

Crypto Index Primed for Launch as Financial Adviser Interest Grows

<div id="highlights-block_61f41033aea5a" class="highlights">
 <ul>
 <li>The firm, which manages $76 billion, is targeting a beta launch of the app during the second quarter</li>
 <li>&#8220;Being native to the blockchain will prove to be one of the great differentiating advantages,” WisdomTree CEO says</li>
 </ul>
 
</div>



ETF specialist WisdomTree has revealed plans to launch a blockchain-native financial services mobile app later this year as it looks to expand its presence in the digital assets space.



Called WisdomTree Prime, the app is designed to offer decentralized finance (DeFi) attributes, such as choice, transparency and inclusivity, CEO Jonathan Steinberg said during a Friday earnings call.



It will allow users to save, spend and invest in cryptoassets such as bitcoin and ether, blockchain-enabled funds and tokenized versions of physical assets like gold, company executives said.



“It’s the convergence of blockchain technology with universal smartphone ownership and tokenization with smart contracts that will effectively blur the lines between savings, payments and investments, fundamentally changing the way consumers view and interact with their own money and assets,” Steinberg said.



WisdomTree, which has $76 billion of assets under management, is targeting a beta launch of the app in certain states during the second quarter, with a national rollout expected by the end of the year.&nbsp;&nbsp;



Steinberg noted the efficiencies and enhancements that blockchain technology offers, such as near-instant transfers and automation. He compared the emerging space to the ETF industry 25 years ago, but called it a larger opportunity.



“Many have created these mobile apps but are using the old rails, so they’re not native to the blockchain,” the CEO said. “I can’t stress enough that starting now, being native to the blockchain will prove to be one of the great differentiating advantages.”&nbsp;&nbsp;&nbsp;



<h3>Recent product expansion</h3>



The upcoming app launch follows WisdomTree’s crypto product expansion in recent months.&nbsp;



The company in November <a href="https://cms.blockworks.co/wisdomtree-launches-spot-etps-in-europe/">added</a> three physically backed cryptocurrency basket exchange-traded products (ETPs) to its lineup of offerings in Europe.&nbsp;



WisdomTree Global Chief Investment Officer Jeremy Schwartz said Friday that the firm has a “strong pipeline” for additional crypto ETPs in the region. In the US, he added, separately managed accounts and direct indexing are currently the best ways for advisors to give their clients crypto exposure.



The firm <a href="https://cms.blockworks.co/wisdomtree-and-ritholtz-wealth-management-launch-crypto-index/">began offering a crypto index</a> that it created with Ritholtz Wealth Management in December.&nbsp;



WisdomTree, which has 75 ETFs trading in the US with roughly $47 billion of assets, also recently began providing <a href="https://cms.blockworks.co/which-mutual-funds-etfs-are-making-crypto-related-investments/">exposure to bitcoin futures contracts</a> within actively managed commodity and managed futures strategies.&nbsp;



The company <a href="https://cms.blockworks.co/wisdomtree-amends-bitcoin-etf-application/">amended its application</a> for an ETF in December that would invest directly in bitcoin a week after the US Securities and Exchange Commission (SEC) rejected its proposal.



“We have no guidance on when [that] might be approved,” Will Peck, WisdomTree’s head of digital assets, said during the earnings call. “But we’re very optimistic that ultimately spot ETFs will be approved here in the US for bitcoin and ether.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

WisdomTree to Launch Digital Assets Consumer App

<div id="highlights-block_61de0e61f8817" class="highlights">
 
</div>


<div id="highlights-block_61de0e74f8818" class="highlights">
 <ul>
 <li>WisdomTree recently added bitcoin futures contracts to its Enhanced Commodity Strategy Fund and its Managed Futures Strategy Fund</li>
 <li>Adding exposure to bitcoin futures helps funds from a marketing perspective, according to Morningstar’s director of global ETF research</li>
 </ul>
 
</div>



Investors in mutual funds and ETFs may be getting exposure to crypto without even noticing, as fund managers have increasingly expanded their mandates to allocate to bitcoin futures contracts and other crypto-related investments.



ETF issuer WisdomTree, which has 75 ETFs trading in the US with nearly $50 billion in combined assets, now offers exposure to bitcoin futures contracts within its actively managed commodity and managed futures strategies.&nbsp;



BlackRock, the world’s largest asset manager, began allowing two of its funds with $70 billion in assets to offer crypto exposure a year ago and has also been allocating to bitcoin futures.



<h3>Crypto exposure in ETFs</h3>



WisdomTree’s Enhanced Commodity Strategy Fund (GCC), which may invest up to 5% of its net assets in bitcoin futures contracts, added a 3% allocation to bitcoin futures in October, a firm spokesperson told Blockworks. The fund has $225 million in assets.



“The 3% allocation to bitcoin futures was made from the fund’s position in gold, motivated by the view that bitcoin is often compared to digital gold,” WisdomTree Global CIO Jeremy Schwartz told Blockworks in an email.&nbsp;



As of Jan. 10, GCC reported a 9.4% allocation to gold, and its allocation to bitcoin shrunk slightly from October to about 2%, according to WisdomTree’s website.



The WisdomTree Managed Futures Strategy Fund (WTMF), which has $163 million in assets, gained the ability to allocate up to 5% bitcoin futures exposure on Jan. 1. It added a roughly 1.5% allocation to bitcoin futures contracts on Jan. 6, according to a firm spokesperson.



The low historical correlation between bitcoin futures and other asset classes bodes well for enhancing the risk-adjusted return profile, Schwartz explained.



“We are not in a full position based on the short-term pull-back we’ve experienced but also think the long-term trends represent an attractive entry point for our starter position in this strategy,” Schwartz added. “The weighting is more tactical and will evolve as the market evolves.”



Both GCC and WTMF are actively managed ETFs, which allows them to adapt to markets quicker than indexes with stakeholders with concerns trading of crypto futures, the WisdomTree executive explained.&nbsp;&nbsp;



“We expect, in time, even futures-based index strategies will see the diversifying appeal of bitcoin futures and look to add it to commodity strategies,” Schwartz said, “and we like being an early leader in this vein.”



Crypto-related investments have also been packaged within equity ETFs.&nbsp;&nbsp;



Simplify ETFs launched its US Equity PLUS GBTC ETF (SPBC) in May. The fund, which has $114m in assets, primarily invests in US equities while also offering investors a 10% exposure to bitcoin through the Grayscale Bitcoin Trust (GBTC).



Fund group Global X <a href="https://cms.blockworks.co/global-x-offers-different-type-of-bitcoin-futures-etf/" target="_blank" rel="noreferrer noopener">brought to market</a> its Blockchain &amp; Bitcoin Strategy ETF (BITS) in November. The fund invests in global issuers that the firm believes are positioned to benefit from further advances in blockchain technology, as well as long positions on US-listed bitcoin futures contracts.



<blockquote class="wp-block-quote">Some are skeptical about the benefit of adding crypto exposure to funds, however. “Whether there is investment merit in adding exposure to bitcoin futures is debatable; there is no debate that it helps boost these funds’ marketing,” Ben Johnson, director of global ETF research for Morningstar, told Blockworks. “It is in many ways akin to how you see processed food marketed. ‘Now with Bitcoin!’ is becoming the ‘Now with Omega 3s’ of the asset management industry.”</blockquote>



Asset managers have one of three views of crypto, according to David Snowball, publisher of the Mutual Fund Observer.&nbsp;



“The first group avoids crypto and occasionally wonders about how to profit from the coming disaster,” Snowball explained. “The second group imagines adding a 5% position as a hedge to a traditional portfolio. The third group uses it as a marketing gimmick … or as a tool to goose lackluster returns.”



<h3>BTC exposure in mutual funds&nbsp;</h3>



BlackRock revealed in January 2021 filings that its Strategic Income Opportunities Fund (BASIX) and its Global Allocation Fund (MDLOX) could invest in cash-settled bitcoin futures traded on commodity exchanges registered with the Commodity Futures Trading Commission (CFTC).&nbsp;&nbsp;



According to a report obtained by Blockworks from BlackRock, the Strategic Income Opportunities Fund had long positions on 123 exchange-traded bitcoin futures contracts, as of June 30, which were set to expire on July 30, 2021. A separate report showed that the Global Allocation Fund had long positions on 80 bitcoin futures contracts, as of April 30, which were set to expire on May 28.



A BlackRock spokesperson declined to comment on the reasoning behind its bitcoin futures allocation levels or if the firm intends to allow more of its funds to make such investments.&nbsp;&nbsp;&nbsp;&nbsp;



<a href="https://cms.blockworks.co/neuberger-berman-begins-offering-exposure-to-crypto/" target="_blank" rel="noreferrer noopener">Neuberger Berman revealed</a> in an Aug. 11 <a href="https://www.sec.gov/Archives/edgar/data/0001317474/000089843221000598/nbaf-20210224.htm" target="_blank" rel="noreferrer noopener">SEC filing</a> that its Commodity Strategy Fund (NRBAX) would offer exposure to cryptocurrency investments and digital assets through crypto derivatives, such as bitcoin futures and ether futures, as well as investments in bitcoin trusts and ETFs.



The fund’s allocation to crypto-related investments was 0.88%, as of Nov. 30, according to a Neuberger Berman spokesperson.



Morningstar Analyst Bobby Blue said in a November <a href="https://www.morningstar.com/articles/1068472/article" target="_blank" rel="noreferrer noopener">research note</a> that 47 mutual funds and separately managed accounts held the Grayscale Bitcoin Trust as of September, which is the most of any crypto investment product.



Morgan Stanley <a href="https://cms.blockworks.co/morgan-stanley-funds-add-more-than-2-64m-shares-of-gbtc-in-q3/" target="_blank" rel="noreferrer noopener">bought millions of additional shares of GBTC</a> for a few of its funds during the third quarter of 2021.



Stone Ridge Asset Management revealed <a href="https://www.sec.gov/Archives/edgar/data/0001559992/000119312521055278/d129263d485apos.htm" target="_blank" rel="noreferrer noopener">in a February filing</a> that its Diversified Alternatives Fund (SRDAX) would look to generate returns by selling put options on bitcoin, bitcoin futures contracts and ETFs that invest in bitcoin futures or the crypto asset directly.



The $312 million fund had invested in 80 bitcoin futures contracts, which were set to expire on Nov. 28, 2021, according to an annual report released on Oct. 31.



Though a handful of managers that modified their funds to enable them to add investments such as bitcoin futures have begun allocating to crypto-related investments, others have not yet, Mutual Fund Observer’s Snowball noted. He added that prospectuses often contain strategies that managers have no intention of using.



“Large funds and ETFs are not known for being bold or innovative; their greater impulse is to retain assets, which is easier with calm mediocrity than with explosive moves,” Snowball said. “If one or two large funds … make dramatic gains in assets through crypto exposure, I would expect the herd to soon follow.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

Which Mutual Funds, ETFs Are Making Crypto-related Investments?

<div id="highlights-block_61b24589b50c4" class="highlights">
 <ul>
 <li>The US Securities and Exchange Commission (SEC) denied WisdomTree’s spot bitcoin ETF in a Dec. 1 letter</li>
 <li>The ETF’s proposed custodian, US Bank, rolled out its crypto custody services for fund managers in October</li>
 </ul>
 
</div>



WisdomTree amended its application for an ETF that would invest directly in bitcoin after the US Securities and Exchange Commission (SEC) rejected its proposal for such a product last week.



“The trust is not registered under the Investment Company Act of 1940, as amended,” according to <a href="https://www.sec.gov/Archives/edgar/data/1850391/000119312521350924/d122075ds1a.htm" target="_blank" rel="noreferrer noopener">a Dec. 8 filing</a>. “However, the sponsor is applying certain of the substantive requirements of the 1940 Act to the operations, infrastructure and oversight of the Trust [in] order to provide investors with some of the significant protections of the 1940 Act.”



As part of the changes, the WisdomTree Bitcoin Trust would use US Bank as a qualified custodian, the SEC disclosure indicates.



<a href="https://cms.blockworks.co/banking-giant-launches-custody-services-for-bitcoin/" target="_blank" rel="noreferrer noopener">US Bank rolled out</a> its crypto custody services for fund managers in October. A company announcement noted at the time that the custody services are intended for institutional investment managers with private funds in the US or Cayman Islands who would like to secure their bitcoin.



Bitcoin-focused financial services company NYDIG was also named the first crypto sub-custodian announced in US Bank’s network of providers.



US Bank had announced in April that it would administer NYDIG’s planned bitcoin ETF this year, pending regulatory approvals. That same month, US Bank participated in <a href="https://cms.blockworks.co/state-street-u-s-bank-in-on-30m-securrency-raise/" target="_blank" rel="noreferrer noopener">a funding round</a> for blockchain-based financial and regulatory technology firm Securrency.



US Bank Wealth Management and Investment Services had about $8.6 trillion in assets under custody and administration and $282 billion in assets under management, as of June 30.



A spokesperson for the company did not immediately return Blockworks’ request for comment.



Though not technically a bank, Fidelity also offers custody services for bitcoin ETFs, noted Sumit Roy, crypto editor and analyst at <a href="https://www.etf.com" target="_blank" rel="noreferrer noopener">ETF.com</a>.&nbsp;



“That said, it is much more common to see a firm like Coinbase act as a custodian, and that&#8217;s for good reason,” he told Blockworks. “They have been providing crypto custody services for a long time, and they have a great reputation.”



Also, under the 1940 Act, the WisdomTree Bitcoin Trust will provide daily disclosures required for ETFs, such as its portfolio holdings, net asset value per share, market price and any premium or discount as well as its media bid-ask spread, according to the amended filing. The trust’s financial statements will be audited at least annually by an independent registered public accounting firm and WisdomTree will comply with financial record keeping and reporting requirements under the Sarbanes-Oxley Act of 2002.



A WisdomTree spokesperson for the fund group declined to comment beyond the filing.



<h3>Still no spot bitcoin ETF in US</h3>



SEC Chairman Gary Gensler said during a virtual forum in August that the agency would prefer ETFs filed under the Investment Company Act of 1940 that were limited to bitcoin futures contracts. ProShares launched the US’s first futures-based ETF in October and a couple of issuers have brought to market similar offerings.&nbsp;&nbsp;



The amended application comes after the SEC wrote <a href="https://www.sec.gov/rules/sro/cboebzx/2021/34-93700.pdf">a le</a><a href="https://www.sec.gov/rules/sro/cboebzx/2021/34-93700.pdf" target="_blank" rel="noreferrer noopener">t</a><a href="https://www.sec.gov/rules/sro/cboebzx/2021/34-93700.pdf">ter on Dec. 1</a> denying WisdomTree’s proposed spot bitcoin ETF intended for the US market.&nbsp;



Similar to the SEC’s <a href="https://cms.blockworks.co/sec-rejects-vanecks-proposed-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">rejection of VanEck’s planned bitcoin ETF</a>, the SEC notes that the Cboe BZX Exchange, on which the ETF’s shares would trade, did not meet certain requirements of the Securities Exchange Act of 1934. A section of the law requires a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices” and to protect investors.



The rejection of VanEck’s proposed product led to many <a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">industry professionals saying</a> they do not expect the SEC to allow a spot bitcoin ETF to hit the US market until the second half of 2022, at the earliest.&nbsp;



<blockquote class="wp-block-quote">“I don&#8217;t think this is going to necessarily move the needle in terms of the SEC approving a spot bitcoin ETF,” Roy said of WisdomTree’s amendments.</blockquote>



WisdomTree manages roughly $75 billion assets, globally. The firm has spot bitcoin and Ethereum ETFs trading in Europe <a href="https://cms.blockworks.co/wisdomtree-launches-spot-etps-in-europe/" target="_blank" rel="noreferrer noopener">and added</a> several physically backed cryptocurrency basket exchange-traded products in the region last month.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
<hr class="wp-block-separator">

WisdomTree Amends Bitcoin ETF Application

<div id="highlights-block_61aa518a8cdd9" class="highlights">
 <ul>
 <li>The RWM WisdomTree Crypto Index will allow financial advisors to execute this strategy through a packaged direct indexing solution</li>
 <li>Direct ownership of crypto assets through the index is a superior way to get exposure compared to yet-to-be-approved spot bitcoin ETFs, Onramp Invest founder says</li>
 </ul>
 
</div>



WisdomTree and Ritholtz Wealth Management have created an index designed to offer retail investors exposure to the crypto market through a financial advisor.



WisdomTree is an ETF issuer and asset manager managing roughly $76 billion assets globally, and Ritholtz Wealth Management is a New York City-based RIA that offers financial planning and asset management services to high-net-worth households, corporate retirement plans, endowments and charitable foundations.



The RWM WisdomTree Crypto Index is currently made up of 36% bitcoin (BTC), 20% Ethereum (ETH) and 4% each of 11 other crypto assets, which include payment systems, smart contract platforms, layer-2 protocols, oracle networks, crypto indexing services, decentralized finance and the metaverse.&nbsp;



Aside from BTC and ETH, the other coins <a href="https://www.wisdomtree.com/-/media/us-media-files/documents/resource-library/crypto-assets/rwm-wisdomtree-crypto-index-factsheet.pdf" target="_blank" rel="noreferrer noopener">within the index</a> are Fantom, Terra, Polygon, Uniswap, Aave, Sushi Swap, Yearn.finance, Decentraland, Enjin, Chainlink and The Graph.



“As wealth managers, we have a responsibility to adapt our portfolios to this burgeoning opportunity,” Michael Batnick, Ritholtz’s director of research, said in a statement. “As fiduciaries, we have an obligation to do so in a sensible way while harnessing the benefits of increased diversification.”



<h3>Offering advisors access to crypto</h3>



The index has been licensed to <a href="https://onrampinvest.com" target="_blank" rel="noreferrer noopener">Onramp Invest</a>, an integration platform that provides access to crypto assets for registered investment advisors (RIAs). It is available to financial advisors using its technology platform to manage separate accounts of clients.



Onramp Invest will supply the SMA architecture, rebalancing technology and customer support for financial advisors. <a href="https://www.gemini.com" target="_blank" rel="noreferrer noopener">Gemini</a>’s custody infrastructure and crypto-native exchange will drive the index’s creation, according to the firms.



The RWM WisdomTree Crypto Index is the best assembled structure and diversified crypto asset exposure currently available to US investors, and particularly the RIA community, argued WisdomTree Chief Investment Officer Jeremy Schwartz.



“Advisors have had a tough time getting access to crypto,” he told Blockworks, noting that there are not yet spot crypto ETFs in the US that they can buy through their brokerage accounts. “Retail is very much to direct, but it’s hard for advisors to manage that the way they manage their practice.”



The lack of crypto access for advisors was a key reason WisdomTree invested in Onramp Invest, Schwartz added. WisdomTree <a href="https://www.globenewswire.com/news-release/2021/05/25/2235508/18051/en/WisdomTree-Announces-Crypto-Model-Portfolios-for-Advisors-in-Collaboration-with-Onramp-Invest-which-features-Gemini-Integration.html" target="_blank" rel="noreferrer noopener">introduced crypto model portfolios</a> for advisors in May, which it noted at the time were available through Onramp Invest and with integration into Gemini.



Eric Ervin, co-founder and CIO at Onramp Invest, said there is $90 trillion of assets in the hands of RIAs and only a small percentage of them have gotten involved in crypto.&nbsp;



“Now we’re kind of opening that door so financial advisors can actually say yes when the client says, ‘Do you offer crypto asset exposure?’” he told Blockworks.



Ervin founded Reality Shares, an asset management firm, ETF issuer and index provider. The company <a href="https://medium.com/blockforce-capital/an-introduction-to-blockforce-capital-2062118c5821" target="_blank" rel="noreferrer noopener">became Blockforce Capital</a> in 2018.



“I literally sold my ETF company because the thought of creating another ETF that owned bitcoin was silly to me,” he explained. “It was like putting training wheels on a Ferrari when really what people need is the exposure in direct form and taking self-custody.”



Gemini allows that direct ownership of crypto assets, Ervin explained. The company became a qualified custodian chartered by the New York State Department of Financial Services (NYDFS) under Section 100 of the New York Banking Law. Gemini <a href="https://www.gemini.com/blog/gemini-crypto-under-custody" target="_blank" rel="noreferrer noopener">hit $30 billion in crypto under custody</a> in May.



“It’s not wrapping everything up in an ETF and hoping that it will get approved, but actually buying assets directly with a qualified custodian,” Ervin said. “We want to give [advisors] the education that [they] need because there’s still a lot of confusion about what is a qualified custodian.”



<h3>WisdomTree’s crypto-focused approach</h3>



WisdomTree has been focused on how blockchain can change the financial world, Will Peck, the firm’s head of digital assets, <a href="https://cms.blockworks.co/wisdomtree-plans-to-launch-more-crypto-offerings-in-2022/">told Blockworks last month</a>, noting that the firm is looking to bring more crypto products to investors in 2022.



WisdomTree CEO Jonathan Steinberg said during the company’s third quarter earnings call in October that he sees a big opportunity for advisors to give their clients crypto exposure through models and separately managed accounts in the US. He noted that the latter vehicle may be financial intermediaries’ preference amid regulatory uncertainty around crypto ETFs.



Though WisdomTree has filed to launch a spot bitcoin ETF in the US, the Securities and Exchange Commission (SEC) has not yet approved ETFs that would invest in crypto assets directly. <a href="https://cms.blockworks.co/sec-rejects-vanecks-proposed-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">The agency last month rejected</a> fund manager VanEck’s proposed bitcoin ETF as its 240-day review period of the planned offering was set to expire.



WisdomTree has physically backed bitcoin and ether exchange-traded products (ETPs) available in Europe and <a href="https://cms.blockworks.co/wisdomtree-plans-to-launch-more-crypto-offerings-in-2022/" target="_blank" rel="noreferrer noopener">added</a> three spot crypto ETPs to its lineup of offerings in the region last week.



The trio of new ETPs track three different indexes. The Crypto Mega Cap Equal Weight index invests exclusively in bitcoin and ether while WisdomTree’s Crypto Market index exposes investors to a diversified basket of crypto assets representing about 70% of the cryptocurrency market capitalization, including BTC and ETH. The firm’s Crypto Altcoins offering excludes bitcoin and ether, as its index comprises assets such as cardano, bitcoin cash, litecoin, polkadot and solana.



The firm could look to expand its index offerings in the US beyond the RWM WisdomTree Crypto Index as the space continues to mature.



“There are all sorts of strategies you can do, but partly you don’t want to confuse the market and have too many choices,” Schwartz said. “As sectors evolve within crypto … those are all candidates of themes.”



<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



<hr class="wp-block-separator"/>

WisdomTree and Ritholtz Wealth Management Launch Crypto Index

<div id="highlights-block_61a4d39fa54f2" class="highlights">
 <ul>
 <li>Three new products begin trading today: WisdomTree Crypto Market (BLOC), WisdomTree Crypto Altcoins (WALT) and WisdomTree Crypto Mega Cap Equal Weight (MEGA) ETPs</li>
 <li>Appetite for diversified basket products increases as institutional investors look beyond just bitcoin and Ethereum, according to WisdomTree’s head of digital assets in Europe</li>
 </ul>
 
</div>



WisdomTree has added three new physically backed cryptocurrency basket exchange-traded products to its lineup of offerings in Europe. 



The firm listed the WisdomTree Crypto Market (BLOC), WisdomTree Crypto Altcoins (WALT) and WisdomTree Crypto Mega Cap Equal Weight (MEGA) ETPs on Tuesday on SIX, the Swiss stock exchange, and Börse Xetra in Germany. They can be sold across the European Union.&nbsp;



The ETPs allow investors to gain diversified exposure to crypto markets as well as participate in the potential growth of decentralized finance, payments, smart contracts and NFTs, said Jason Guthrie, WisdomTree’s head of digital assets in Europe.



The asset class has grown to about $2.6 trillion since its introduction a little over a decade ago, he added, and institutions have shown increased interest in crypto over the past year.



“Going from engagement on the topic to building the approach internally to actually executing on behalf of clients is a journey for institutions, and they understandably move slowly through that,” Guthrie told Blockworks.&nbsp;



<h3>Looking beyond BTC and ETH</h3>



The institutional interest has gone beyond just bitcoin and ether, the executive added, noting that a diversified investment approach rather than concentrated bets within the space provides a “stepping stone” for certain asset managers.



“[There’s] the narrative around the growth smart contract platforms and the idea that it’s not going to be a winner-takes-all technology, that there is a multichain future that focuses on interoperability and the building of the use cases in DeFi, NFTs, the metaverse,” Guthrie explained. “All of that is starting to resonate, and the pace of which they’re picking that up is increasing, so we think there&#8217;s an appetite for these sorts of diversified basket products.”



BLOC offers exposure to a diversified basket of crypto assets, representing about 70% of the cryptocurrency market cap. Its underlying index includes bitcoin, ether, cardano, bitcoin cash, litecoin, polkadot and solana, and the offering rebalances on an annual basis. Each crypto asset has a maximum weighting of 45% and a minimum allocation of 2.5%.



WALT is designed for those who want more exposure to coins besides bitcoin and ether, and its index also comprises cardano, bitcoin cash, litecoin, polkadot and solana.



BLOC and WALT each carry a total expense ratio of 145 basis points.&nbsp;



The Crypto Mega Cap Equal Weight offering, priced at 95 basis points, is the cheapest physically-backed cryptocurrency basket ETP in Europe, the firm noted. It currently allocates to bitcoin and ether, with a quarterly rebalance.



Family offices and private bank networks will likely be the first to allocate to the new WisdomTree products, Guthrie said, and the firm expects more asset managers to do so within the next year.



Sumit Roy, crypto editor and analyst at ETF.com, told Blockworks that these WisdomTree ETPs are well-designed funds and a good way for investors to get diversified exposure to crypto.



“WisdomTree Crypto Altcoins strikes me as pretty unique,” he noted. “We&#8217;ve seen ‘ex-bitcoin’ funds that invest in the top crypto tokens excluding bitcoin, but this one excludes ether as well, which is interesting.”



<h3>Latest launches part of larger effort</h3>



WisdomTree launched a physically backed bitcoin ETP in 2019 and brought an Ethereum product to the European market earlier this year.&nbsp;&nbsp;



The firm has generated $4 million run rate revenue from crypto ETPs in Europe, executives said during the company’s earnings call a month ago.



WisdomTree CEO Jonathan Steinberg noted on the call that he believes a spot bitcoin ETF is a superior product to <a href="https://cms.blockworks.co/first-bitcoin-futures-etf-nears-1b-on-first-day-of-trading/" target="_blank" rel="noreferrer noopener">bitcoin futures ETFs</a>, which the US Securities and Exchange Commission has recently permitted. The firm is one of many to have proposed a bitcoin ETF designed to invest in the crypto asset directly, though it, along with similar offerings from a range of issuers, awaits approval.



The SEC earlier this month <a href="https://cms.blockworks.co/sec-rejects-vanecks-proposed-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">rejected VanEck’s proposed spot bitcoin ETF</a>, leaving many wondering <a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">when the agency could approve such a product</a>.&nbsp;&nbsp;



Steinberg told analysts on the October 29 call that he is “very confident” that physically backed bitcoin ETFs will ultimately launch in the US.



“I expect that it will play a big role in clients&#8217; portfolios for those that are looking for bitcoin exposure,” Steinberg said, “and WisdomTree will play a big role within the physical market.”



Roy said he doesn’t believe these latest WisdomTree launches will put any pressure on the SEC.



“For eight years, they&#8217;ve faced tremendous pressure from the industry to approve a spot crypto ETF, but they haven&#8217;t budged,” he said of US regulators.



<blockquote class="wp-block-quote">“I think the SEC has made it clear that it will act only when it is ready to do so. That could be months from now; it could be years. We really don&#8217;t know.”</blockquote>



The launches come after WisdomTree added bitcoin futures to its Enhanced Commodity Strategy Fund (GCC) and its Managed Futures Strategy Fund (WTMF), as well as expanded its digital assets team.&nbsp;



Will Peck, WisdomTree’s head of digital assets, <a href="https://cms.blockworks.co/wisdomtree-plans-to-launch-more-crypto-offerings-in-2022/" target="_blank" rel="noreferrer noopener">recently told Blockworks</a> that the firm intends to bring more crypto products to investors in 2022 while also focusing on how blockchain can change the financial world more broadly.&nbsp;&nbsp;



While Guthrie said there are no specific plans yet for additional crypto ETPs in Europe, he expects there to me more demand for single-asset, thematic and multi-asset offerings going forward.



“How can we include bitcoin inside a commodities basket? Is there a way to put a DeFi play next to an equities offering?” he said. “These types of multi-asset thematic approaches I think are going to be very interesting in the future, and so we are looking at all of that and will look to actively grow the range.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
<hr class="wp-block-separator">

WisdomTree Launches Spot ETPs in Europe

<div id="highlights-block_6197e881c4607" class="highlights">
 <ul>
 <li>WisdomTree expanded its digital assets team to include a global head of financial crimes focused on anti-money laundering and regulatory compliance</li>
 <li>ETF product development among the ways the asset manager is positioning itself for “a reorientation of financial services around DeFi concepts,” its head of digital assets says</li>
 </ul>
 
</div>



WisdomTree is looking to bring more crypto products to investors in 2022 while also focusing on how blockchain can change the financial world more broadly.&nbsp;



“We think it’s going to be both a proof of concept but also a real demonstration of the types of value DeFi and [distributed ledger technology]-related can bring to what you might call more traditional financial services,” Will Peck, WisdomTree’s head of digital assets told Blockworks in an interview.



As part of these efforts, the fund group, which had about $76 billion in assets under management as of last month, <a href="https://www.sec.gov/Archives/edgar/data/1859001/000119312521136968/d156395dn1a.htm" target="_blank" rel="noreferrer noopener">filed in April</a> to launch a Digital Short-Term Treasury Fund.&nbsp;



Though the fund’s transfer agent, Securrency Transfers, will maintain the official record of share ownership in book-entry form, it will also be recorded, or digitized, on the blockchain.



WisdomTree had led a nearly $18 million Series A funding round for Securrency, a developer of institutional-grade blockchain-based financial and regulatory technology, in January 2020.



“Through the app made available by WisdomTree and by leveraging Securrency’s blockchain infrastructure technology, it is anticipated that fund shareholders will have the benefit of shares that will be able to operate on more than one blockchain, including the Stellar and Ethereum blockchains, via a bridge to facilitate interoperability between blockchains,” <a href="https://www.sec.gov/Archives/edgar/data/1859001/000119312521136968/d156395dn1a.htm" target="_blank" rel="noreferrer noopener">the document</a> notes.



The fact that the record will be made available on various blockchains, with the ability to transfer the record from one blockchain to another, is “a glimpse of the future,” according to Sumit Roy, crypto editor and analyst at ETF.com.



“In the future, it&#8217;s conceivable that the official record could live on the blockchain and investors will be able to trade their shares peer-to-peer through the blockchain,” Roy told Blockworks. “There are a lot of regulatory hurdles before we get there, but this is a step in that direction.”



<h3>Expanding its digital assets team</h3>



The firm most recently expanded its digital assets team, which now includes 12 members across the United States, United Kingdom and Ireland. The unit, which notably added a four-person research team, is dedicated to technology, compliance, legal, product, marketing, research and education related to digital assets, blockchain and decentralized finance (DeFi).



Among the new hires was John Davidson, who joined WisdomTree as global head of financial crimes. In the new role, he is focused on anti-money laundering, or AML, and regulatory compliance.



Davidson had held a similar position at E-Trade and was a managing director at Morgan Stanley. Prior to that, he spent 19 years as an enforcement attorney and AML policy specialist at the Office of Thrift Supervision, the Federal Reserve’s Board of Governors and the US Securities and Exchange Commission (SEC).



“We are embracing responsible DeFi that upholds the foundational principles of regulation in this innovative and quickly evolving space,” WisdomTree CEO Jonathan Steinberg said in a statement. “We’re a company rooted in innovation and transparency, and we see responsible DeFi as the next chapter for us and the broader financial services industry as a whole.”



WisdomTree expects more technology-focused hires in 2022, a spokesperson noted, as it looks to add to its existing application development team, which develops all client-facing analytics tools.



<h3>Other US ETFs</h3>



The WisdomTree Enhanced Commodity Strategy Fund (GCC) — an actively managed ETF seeking to provide broad exposure to a diversified basket of commodities — last month became the first ETF to add bitcoin futures.&nbsp;



The addition came just before the launch of bitcoin futures ETFs by ProShares and then Valkyrie Investments.&nbsp;



WisdomTree also filed with the SEC last month to add bitcoin futures to its Managed Futures Strategy Fund (WTMF). The ETF, which invests in the futures contracts of 21 commodities — such as crude oil, natural gas, gold, silver and corn — was also seeking to invest up to 5% of its net assets in bitcoin futures contracts.



The firm has proposed a bitcoin ETF that would invest in the crypto asset directly, though it, along with similar offerings from a range of issuers, awaits SEC approval. Steinberg <a href="https://cms.blockworks.co/wisdomtree-ceo-blockchain-could-disrupt-financial-industry-like-etfs-did/" target="_blank" rel="noreferrer noopener">said during an interview</a> at Blockworks’ Digital Asset Summit in September that the SEC’s hesitancy to allow a bitcoin ETF is forcing investors into inferior structures.



“We think there’s some questions and issues with a futures-based bitcoin product; obviously the contango and the position limits kind of leads to an experience where you can get significant tracking error from spot,” Peck said. “So we haven’t been focused on futures in the past, and we think the ultimate best execution is in a spot ETF.”



<h3>Looking ahead&nbsp;</h3>



The firm is generating $4 million of run rate revenue from its crypto exchange-traded products in Europe, Steinberg said during the firm’s third quarter earnings call last month. It launched a physically backed bitcoin ETP in 2019 and brought an Ethereum product to the European market earlier this year.&nbsp;&nbsp;



Additional strategies, such as “crypto basket” exchange-traded products, are in the product development pipeline, WisdomTree President and COO Jarrett Lilien said during the earnings call.



In the US, Steinberg said he sees a big opportunity for advisors to give their clients crypto exposure through models and separately managed accounts. He noted that the latter vehicle may be financial intermediaries’ preference amid regulatory uncertainty around crypto ETFs.



WisdomTree also partnered with Onramp, a workflow company for registered investment advisors, and crypto exchange and custodian Gemini.&nbsp;



The shared initiative, to bring crypto to advisors, got its first model win during the third quarter, executives revealed. Federal Life announced the launch of a variable annuity product that implements a WisdomTree model, comprising nearly two-thirds direct crypto and one-third disruptive technology ETFs. 



“Long-term, we think there’s going to be a reorientation of financial services around DeFi concepts,” Peck told Blockworks. “Maybe that involves more regulation or regulatory approvals or kind of some changes to how it is today, but we think it’s coming, and we want to position ourselves for that future.”



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
<hr class="wp-block-separator">

WisdomTree Plans to Launch More Crypto Offerings in 2022

<div id="highlights-block_61784e924dd70" class="highlights">
 <ul>
 <li>New York-based firm opts to try to include bitcoin futures in broader managed futures offering in the days after the first bitcoin strategy ETFs hit US markets</li>
 <li>WisdomTree offers several products in Europe that invest in cryptocurrencies, but awaits SEC approval for its proposed bitcoin ETF in the US</li>
 </ul>
 
</div>



WisdomTree is looking to broaden the exposures of its managed futures strategy, which focuses mainly on commodities, to include bitcoin futures contracts.



The WisdomTree Managed Futures Strategy Fund (WTMF) is an actively managed ETF that uses a quantitative, rules-based strategy designed to capture price trends in the commodity, currency, equity, and US Treasury futures markets through long and short positions on US-listed futures contracts, according to <a href="https://www.sec.gov/Archives/edgar/data/1350487/000121465921010737/j1021211485apos.htm" target="_blank" rel="noreferrer noopener">an SEC disclosure</a> filed on Monday.&nbsp;



WTMF, which is priced at 65 basis points, launched in January 2011 and has $139 million assets under management, according to ETF.com.&nbsp;&nbsp;



The ETF invests in the futures contracts of 21 commodities — such as crude oil, natural gas, gold, silver and corn — and is now also seeking to invest up to 5% of its net assets in bitcoin futures contracts.&nbsp;



The offering, which will not invest in bitcoin directly, will only invest in cash-settled bitcoin futures traded on the Chicago Mercantile Exchange (CME), which is registered with the Commodity Futures Trading Commission (CFTC).



A WisdomTree spokesperson could not immediately comment.&nbsp;



“With only 5% exposure, maximum, to bitcoin futures, WTMF isn&#8217;t going to be a bitcoin futures proxy, nor is it intended to be,” <a href="https://www.etftrends.com" target="_blank" rel="noreferrer noopener">ETF Trends</a> Managing Editor Lara Crigger told Blockworks. “The managers will now have the flexibility to invest in bitcoin futures, should they see opportunity there as well, but in a limited way that won&#8217;t dominate the risk-return profile of the overall strategy.”



<h3>ETF frenzy </h3>



The filing comes just days after the first bitcoin futures ETFs hit the US market. <a href="https://cms.blockworks.co/proshares-bitcoin-futures-based-etf-to-begin-trading-tuesday/" target="_blank" rel="noreferrer noopener">ProShares was the first</a>, as its Bitcoin Strategy ETF (BITO) has more than $1 billion in assets under management after trading for a week. Valkyrie Investments’ Bitcoin Strategy ETF (BTF) also debuted last week, <a href="https://cms.blockworks.co/valkyries-btf-trades-10m-in-first-5-minutes/" target="_blank" rel="noreferrer noopener">trading $10 million in its first five minutes</a> on the market.



A similar futures-based bitcoin ETF from fund manager VanEck is expected to launch in the coming days.



“My feeling is that WisdomTree can see that the bitcoin futures ETF space is getting crowded and it would be tough to differentiate a product there, especially as a late-comer,” said Sumit Roy, crypto editor and analyst for <a href="https://www.etf.com">ETF.com</a>. “Having bitcoin within a basket of other commodities is something more unique.”



<h3>Waiting for regulators</h3>



Though WisdomTree was not among the wave of issuers to file for a bitcoin futures ETF in the last several months, the New York-based fund group is one of many asset managers waiting for US regulators to allow it to launch ETFs that invest in the cryptocurrency directly.&nbsp;&nbsp;



The company currently offers several exchange-traded products in Europe that invest directly in crypto assets.



WisdomTree CEO Jonathan Steinberg <a href="https://cms.blockworks.co/wisdomtree-ceo-blockchain-could-disrupt-financial-industry-like-etfs-did/" target="_blank" rel="noreferrer noopener">said during an interview</a> at Blockworks’ Digital Asset Summit in September that the SEC’s hesitancy to allow a bitcoin ETF is forcing investors into inferior structures, such as those with higher fees and that trade at a substantial premium or discount.&nbsp;



A downside to futures-based bitcoin ETFs, he noted, is contango — a situation when the futures price is above the expected future spot price.&nbsp;&nbsp;



“The regulators are choosing winners and losers not necessarily with the lens of what the true investor is looking for,” Steinberg said at the time. “&#8230;Like in gold, people want physical gold, not synthetic gold. We’ll see how they feel about bitcoin.”

WisdomTree Seeks to Add Bitcoin Futures to Existing ETF

Blockchain technology can disrupt traditional financial services the way that ETFs have disturbed mutual funds, WisdomTree CEO Jonathan Steinberg said during an interview at Blockworks’ Digital Asset Summit last month.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



“I do believe that this will prove to be the next wrapper that will transform not just asset management, but all of financial services,” he noted.&nbsp;



Steinberg said that current regulatory issues around crypto will have to be solved in order to mainstream the space.



Though WisdomTree currently offers several exchange traded products in Europe that invest in cryptocurrencies, it awaits approval from the SEC for its proposed bitcoin ETF in the US.&nbsp;



“The SEC is starting to understand that not approving a bitcoin [exchange traded product] is forcing investors into inferior structures and it is having negative consequences,” he noted.



Watch the full interview below and watch all of the panel videos from DAS <a href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/#videoslider0" target="_blank" rel="noreferrer noopener">here</a>.



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="DAS NYC 2021: WisdomTree CEO Says Blockchain Could Disrupt Financial Industry Like ETFs Did" width="1024" height="576" src="https://www.youtube.com/embed/Mb9DYV9gPNM?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<hr class="wp-block-separator"/>



Are you a UK or EU reader that can’t get enough investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.



<hr class="wp-block-separator"/>