Date: January 25, 2023
Time: 11:00 a.m.-12:00 p.m. PT
Reason for Meeting: Standard monthly meeting
In Attendance: Matt Hougan (Chair), Hunter Horsley (Member), Hong Kim (Member), Katherine Dowling (Observer), Anais Rachel (Observer), Gayatri Choudhury (Observer), Kristen Corkill (Observer), Mallika Kolar (Observer), Ryan Rasmussen (Observer), and Satyajeet Pal (Observer)
1: Welcome and Attendance
All members of the Committee were present at the meeting.
2: Review and Verify All Data Sources for Uptime, Accuracy, and Robustness
The Bitwise Engineering team confirmed that all data sources were working as expected with regard to uptime, accuracy, and robustness.
3: Review and Approve Any Proposed Changes to the Bitwise Crypto Index Methodology
The Committee discussed two proposed changes to the Bitwise Crypto Index methodology, and voted in favor of two changes.
a. The Committee discussed rule III.B.h.i of the methodology (Crypto Asset Eligibility Requirement).
The rule states an eligible crypto asset must “trade more than 10% of its free-float-adjusted market capitalization on Eligible Crypto Asset Trading Venues over the past 30 days. This requirement exists to ensure the crypto assets included in the index are sufficiently liquid to facilitate easy investment and withdrawals.”
The revision proposal included reducing the 30-day trading volume requirement from 10% to 5%. This adjustment would bring the Bitwise Crypto Asset Index Methodology more in line with comparable traditional market index providers, which have significantly lower liquidity requirements.
The Committee voted 3-0 in favor of reducing the percentage of free-float-adjusted market capitalization on Eligible Crypto Asset Trading Venues over the past 30 days from 10% to 5%. The change will be effective as of the January 31, 2023 index rebalance.
b. The Committee discussed eliminating the Bitwise 20, the Bitwise 70, and the Bitwise 100 Indexes.
The Committee voted 3-0 in favor of eliminating the Bitwise 20, the Bitwise 70, and the Bitwise 100 Indexes.
4: Review and Approve All Methodological Decisions That Require Judgment
The Committee discussed three methodological decisions that require judgment.
a. Eligible Crypto Asset Trading Venues: The Index Committee voted unanimously 3-0 to reaffirm the following trading venues as Eligible Crypto Asset Trading Venues for 2023: Binance, Bittrex, Bitstamp, Coinbase, Gemini, Kraken, BitFlyer, ItBit, and LMAX.
b. Reaffirm list of third party custodians: The Index Committee voted unanimously 3-0 to reaffirm the following list of eligible third party custodians: Anchorage, Bakkt Warehouse, BitGo, Coinbase Custody, Fidelity Digital Assets, and Gemini Custody.
c. Lukka third-party pricing change: The Index Committee voted to replace the Bitwise CAP price with the Lukka Prime Intraday price in February.
5: Developments Impacting the Market and/or Individual Bitwise Crypto Index Constituents
The Committee discussed a large number of developments impacting the market and/or individual Bitwise Crypto Index constituents, including the SEC’s charges against Genesis and Gemini; the Polygon (MATIC) network’s recent hard fork; and FTX's and Genesis' bankruptcy proceedings, among other topics.
6: Review Expected Changes to Bitwise Indexes
The Committee reviewed the expected changes to the Bitwise Crypto Indexes, and determined that the reconstitution process is running appropriately.
The Chair adjourned the meeting.
Based in San Francisco, Bitwise is one of the largest and fastest-growing crypto asset managers, offering both index and active strategies across a wide array of investment vehicles. The firm is known for creating the world’s largest crypto index fund (OTCQX: BITW), a suite of crypto-focused equity and futures ETFs, and investment products that span Bitcoin, Ethereum, DeFi, NFTs, and the Metaverse. Bitwise focuses on partnering with financial advisors and investment professionals to provide quality education and research. The team at Bitwise combines expertise in technology with decades of experience in traditional asset management and indexing, coming from firms including BlackRock, Blackstone, Meta, and Google, as well as the U.S. Attorney’s Office. Bitwise is backed by leading institutional investors and asset management executives, and has been profiled in Institutional Investor, CNBC, Barron’s, Bloomberg, and The Wall Street Journal.
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