🧮 Audit me maybe

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Hey!

Usually, this email would be penned by the delightful and insightful Kate Irwin. Not so this time around, but it’s not all bad. 

Kate will be back in a few weeks. In the meantime, the rest of Blockworks editorial is gunning to tell you what’s what around crypto instead. 

So, here’s Katherine Ross, news editor and Empire newsletter extraordinaire to take it away for Tuesday with some coverage of Bitwise’s bitcoin ETFs.

You can handle the truth

Bitwise is rolling out third-party daily attestations for its bitcoin ETFs, Blockworks has exclusively learned. 

The attestations will replace the wallet addresses on the Bitwise site, Bitwise CEO Hunter Horsley tells me.

“The third-party CPA’s report will have examined the assets onchain, so the holdings of the funds, but then we'll have also examined the liabilities, and so we'll have looked at both sides of the ledger, and then [the] third party will provide a report on the state of those things. The report is very easy to consume and will be available daily. This is an evolution, from my perspective,” he explained.

The goal is to make the attestations consumable and simplify the information available because, as Horsley noted, the list of wallet addresses is around 90. 

The big takeaway, for me, is just how much things have changed this year. Horsley told me that they’ve gone from proactively arranging meetings with large institutions every few weeks to now having institutions cold-email them in the hopes of starting the conversation. 

While they operate in different parts of crypto, it’s very similar to what Securitize’s Carlos Domingo told us yesterday. The institutions are here, and they’re eager to take part. 

“So I think that helping people pull the thread on their curiosity or their understanding, to build a conviction, is hugely important, and it's what Bitwise really does. And so…I think that this year has just been remarkable. I mean, we've been around for over seven years, and this year is absolutely just a watershed year in terms of mainstream investors coming online,” Horsley said. 

The daily attestation report, in place of wallet addresses, also speaks to the level of investor coming in. Not everyone is able to understand wallet addresses, so the hope is that the new system is easier for a larger audience to digest. 

“People are going to wake up in 12 months and say, ‘Wait a minute, when did everyone get into crypto?’ One of the funny dynamics of the moment that still hasn't changed is that even for all of the new firms that are coming into the space and investing in the space, we have wealth management clients that have 30% of their clients' assets in crypto. That's not the majority, but we have clients that have a ton of conviction and knowledge, and then people who are early in their journey,” he noted.

But there’s a bit of a weird dynamic, because even those institutions that are pretty bullish on crypto behind closed doors don’t necessarily want to be publicly named as giving clients access to Bitwise products. 

So while real adoption is taking place, a lot of it is behind the scenes. We’re not quite at the moment where everyone wants to come out as pro-crypto, though it seems more and more firms are exploring. 

— Katherine Ross

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