Built by crypto experts, the fund gives investors focused exposure to companies building the next iteration of the internet.
Bitwise Asset Management, the world’s leading crypto index fund manager with more than $1.3 billion in assets under management,¹ today announced the launch of the Bitwise Web3 ETF (ticker: BWEB). The strategy gives investors access to companies well positioned to benefit from the emergence of Web3, a term used to describe the next wave of the internet’s development characterized by greater decentralization and individual ownership of data.
As the Web3 name suggests, one well-established paradigm defines the internet’s evolution in three stages. The earliest version of the Web (Web1) consisted of “read-only” web sites. Next came social media sites like Facebook and Twitter, where users could both read and write content (Web2). With the inception of Web3, users have the ability not only to read and write content, but to own digital objects, assets, and data that are largely built on crypto and blockchain technology.
“Today, many experts believe we’re on the cusp of a major evolution in the core architecture of the internet,” said Bitwise CIO Matt Hougan. “Any shift of that magnitude will depend on companies that can provide the services and infrastructure to support it. With the Bitwise Web3 ETF, we’re excited to give investors the opportunity to capture one of the fastest-emerging themes in technology through a diverse mix of companies that we believe will lead the charge.”
The Bitwise Web3 Equities Index on which the fund is based includes broad exposure to companies spread across five key themes: Web3 Infrastructure Providers, Web3 Finance, Web3-Enabled Metaverse and Digital Worlds, Web3-Enabled Creator Economy, and Web3 Development and Governance. More than 85% of the portfolio will be invested in companies directly linked to Web3 themes and business activities.
“Today’s Web3 companies are not only helping reshape the internet as we know it, but they’re among some of the most disruptive and fastest-growing firms in the world,” said Bitwise CEO Hunter Horsley. “The Bitwise Web3 ETF seeks to capitalize on this great opportunity by offering investors of innovation a straightforward way to access the space. It also leverages our expertise in crypto—the cornerstone of Web3—as many of these companies are centering their businesses on blockchain technology. We’re looking forward to seeing their anticipated continued growth as the space unfolds.”
The launch of the Bitwise Web3 ETF is part of a growing suite of Bitwise investment solutions that help investors gain professionally managed exposure to the crypto market, including the Bitwise Crypto Industry Innovators ETF (ticker: BITQ), OTC-traded trusts, private placement funds, and separately managed accounts. Today, Bitwise serves RIAs, multifamily offices, financial advisors, and other institutional managers, with a nationwide distribution and client service team.
The Bitwise Web3 ETF tracks the Bitwise Web3 Equities Index, which is rebalanced quarterly. The fund is available to both retail and institutional investors through their advisors and is not subject to investment minimums. The custodian of the Bitwise Web3 ETF is BNY Mellon, and the fund’s distributor is Foreside Fund Services, LLC.
(1) As of December 31, 2021.
Risks and Important Information
Carefully consider the fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s full or summary prospectus, which may be obtained by visiting https://www.bwebetf.com/materials. Investors should read it carefully before investing.
Investing involves risk, including the possible loss of principal. There is no guarantee or assurance that the methodology used to create the Index will result in the Fund achieving positive investment returns or outperforming other investment products. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index. In addition, the Fund’s returns may not match the Index due to expenses incurred by the Fund or lack of precise correlation with the Index.
The Fund is non-diversified and will not invest in crypto assets directly or through the use of derivatives and also will not invest in initial coin offerings. The Fund may, however, have indirect exposure to crypto assets by virtue of its investments in Web3 equities that use one or more crypto assets as part of their business activities or that hold crypto assets as proprietary investments.
In addition to the normal risks associated with investing, international investments (including through American Depositary Receipts (ADRs)) may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. ADRs may be less liquid than the underlying shares in their primary trading market. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments and investments in small companies typically exhibit higher volatility.
Investors in the fund should be willing to accept a high degree of volatility in the price of the Fund’s shares and the possibility of significant losses. An investment in the fund involves a substantial degree of risk.
Certain of the Fund’s investments may be subject to the risks associated with investing in blockchain technology. The risks associated with blockchain technology may not fully emerge until the technology is widely used. Blockchain systems could be vulnerable to fraud, particularly if a significant minority of participants colluded to defraud the rest. Because blockchain technology systems may operate across many national boundaries and regulatory jurisdictions, it is possible that blockchain technology may be subject to widespread and inconsistent regulation. Blockchain technology also may never be implemented to a scale that provides identifiable economic benefit to the companies included in the underlying Index.
The technology relating to crypto assets and blockchain is new and developing. Currently, there are a limited number of publicly listed or quoted companies for which crypto assets and blockchain technology represent an attributable and significant revenue stream. This concentration in fewer companies may make the Fund more susceptible to adverse events that affect the Fund’s holdings more than the market as a whole.
The Fund is recently organized, giving prospective investors a limited track record on which to base their investment decision.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
The Bitwise Web3 Equities Index provides broad exposure to companies spread across five key themes: Web3 Infrastructure Providers, Web3 Finance, Web3-Enabled Metaverse and Digital Worlds, Web3-Enabled Creator Economy, and Web3 Development and Governance. More than 85% of the index is comprised of "pure-play" companies directly linked to Web3 themes and business activities.
Bitwise Investment Manager, LLC serves as the investment advisor of the BWEB ETF. The Fund is distributed by Foreside Fund Services, which is not affiliated with Bitwise Investment Manager LLC, Bitwise, or any of its affiliates.
Exchange Traded Concepts, LLC serves as the investment advisor of the BITQ ETF. The Fund is distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Exchange Traded Concepts, LLC, Foreside Fund Services, Bitwise, or any of its affiliates.
Based in San Francisco, Bitwise is one of the largest and fastest-growing crypto asset managers. As of year-end 2021, Bitwise managed $1.3 billion across an expanding suite of investment solutions. The firm is known for managing the world’s largest crypto index fund (OTCQX: BITW) and pioneering products spanning Bitcoin, Ethereum, DeFi, and crypto-focused equity indexes. 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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