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)
Item 1: Review 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 2: Review 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 3: Developments 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 4: Other Items
The Committee had no further items to discuss.
Item 5: Adjournment
The Chairman adjourned the meeting.
Bitwise Asset Management is the largest crypto index fund manager in America. Thousands of financial advisors, family offices, and institutional investors partner with Bitwise to understand and access the opportunities in crypto. For six years, Bitwise has established a track record of excellence managing a broad suite of index and active solutions across ETFs, separately managed accounts, private funds, and hedge fund strategies. Bitwise is known for providing unparalleled client support through expert research and commentary, its nationwide client team of crypto specialists, and its deep access to the crypto ecosystem. The Bitwise team of more than 60 professionals combines expertise in technology and asset management with backgrounds including BlackRock, Millennium, ETF.com, Meta, Google, and the U.S. Attorney’s Office. Bitwise is backed by leading institutional investors and has been profiled in Institutional Investor, Barron’s, Bloomberg, and The Wall Street Journal. It has offices in San Francisco and New York. For more information, visit www.bitwiseinvestments.com.
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