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Bitwise Crypto Index Committee Meeting
December 29, 2020

San Francisco
December 29, 2020

Standard Monthly Meeting – December 2020

Committee Meeting 3

Bitwise Crypto Index Committee Meeting

Date:

December 29, 2020

Time:

2:00 – 2:30 P.M. PT

Reason for Meeting:

Standard Monthly Meeting

In Attendance:

Matt Hougan (Chair), Hunter Horsley (Member), David Lawant (Member), Satyajeet Pal (Observer)

Meeting Notes

Item 1Review And Verify All Data Sources For Uptime, Accuracy, And Robustness

Description:

The Committee will discuss if there are any issues with the uptime, accuracy, or robustness of our data sources.

Discussion:

The Committee found that all data sources are functioning appropriately

Item 2Review And Approve All Methodological Decisions That Require Judgment

The Committee will discuss if there are any issues with the uptime, accuracy, or robustness of our data sources.

Description:

The Committee will discuss and review any recent methodological implementation decisions that required judgment, as well as any known upcoming decisions.

Discussion 1 – XRP Removal:

The committee reflected over the steps that it took after the U.S. Securities and Exchange Commission (“SEC”) filed an action in the United States District Court for the Southern District of New York on December 22, 2020, alleging, among other things, that XRP is a security subject to the registration requirements of the federal securities laws. The committee agreed that its decision to remove XRP on an emergency basis was appropriate given Rule III.B.i.g of the Bitwise Crypto Index Methodology.

Discussion 2 – Five-Year Inflation Adjustment:

Committee Chairman Matt Hougan proposed that the Committee remove the “five-year inflation adjustment” embodied in Rule V.B of the Bitwise Crypto Index Methodology when calculating each cryptoasset’s market capitalization. The committee voted unanimously in favor of the change. The change will become effective at the next index reconstitution.

Discussion 3 – Cosmos:

After reviewing the data, the Committee determined that Cosmos (ATOM) would join the Bitwise 10 Large Cap Crypto Index at the next reconstitution event, taking the place of XRP. No other changes to the index are expected.

Item 3Developments Impacting The Market And/Or Individual Bitwise 10 Constituents

Description:

The Committee will discuss significant new and/or pending developments surrounding either the cryptomarket in general or any Bitwise 10 constituent specifically, and consider whether they raise any concerns or issues for the index.

Discussion – Ethereum Classic:

Ethereum Classic (ETC) is currently precluded from participating in the Bitwise 10 Large Cap Crypto Index because it does not clear rule III.B.i.f, which removes assets that have “known security vulnerabilities, including critical bugs, undue exposure to 51% attacks, or other factors, as determined by the Bitwise Crypto Index Committee.”

The Committee determined that, in the coming month, Chairman Matt Hougan and Member David Lawant will analyze whether recent technical developments in the protocol allow ETC to clear this requirement. Importantly, even if this change materializes, ETC would still not be eligible for the Bitwise 10 Large Cap Crypto Index based on its current market capitalization.

Item 4Other Items

The Committee had no further items to discuss.

Item 5Adjournment

The Chairman adjourned the meeting.

Important Disclosures

Bitwise Asset Management, Inc. and its affiliates (collectively, the “Manager”) have produced and distributes this Presentation for informational purposes only and in relation to a potential opportunity to subscribe for limited liability company interests (“Interests”) in any of several Funds offered only to certain Accredited Investors by the Manager, including the Bitwise 10 Crypto Index Fund, LLC; the Bitwise Bitcoin Fund, LLC; the Digital Asset Index Fund, LLC; the Bitwise 10 Index Offshore Fund, Ltd.; and the Bitwise Ethereum Fund, LLC. Any offer to sell or the solicitation of an offer to buy Interests in those Funds will solely and exclusively be made through definitive offering documents, identified as such, in respect of each Fund and in compliance with the terms of all applicable securities and other laws. Such definitive offering documents, if any, will describe risks related to an investment in the Funds (including loss of the entire investment) and will qualify in their entirety the information set forth in this Presentation. Prior to making any investment decision with respect to any Fund, each investor must undertake its own independent examination and investigation of the Fund, including the merits and risks involved in an investment in the Interests, and must base its investment decision—including a determination whether Interests would be a suitable investment for the investor—on such examination and investigation, and must not rely on the Manager or the Fund in making such investment decision. Prospective investors must not construe the contents of this Presentation as legal, tax, investment, or other advice. Each prospective investor is urged to consult with his or her own advisors with respect to legal, tax, regulatory, financial, accounting, and similar consequences of investing in the Fund, the suitability of the investment for such investor, and other relevant matters concerning an investment in the Fund. The summary set forth in this Presentation does not purport to be complete and is qualified in its entirety by reference to the definitive offering documents relating to the Fund. Do not place undue reliance on this Presentation. Performance information is provided for informational purposes only. Actual performance of any Fund may vary substantially from the performance provided in this presentation. Backward-looking performance cannot predict how any investment strategy will perform in the future. The Units of the Funds (the “Interests”) have not been registered under the Securities Act of 1933, the securities laws of any state, or the securities laws of any other jurisdiction, nor is such registration contemplated. The Interests will be offered and sold under the exemption provided by Section 4(a)(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder and other exemptions of similar import in the laws of the states and jurisdictions where the offering will be made. The offer and sale of the Interests have not been registered with or approved or disapproved by the Securities and Exchange Commission (the “SEC”) or the securities commission or regulatory authority of any state or foreign jurisdiction.

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