Bitwise Asset Management, a prominent crypto asset manager, has officially announced its strategic acquisition of ETC Group, a leading European issuer of crypto exchange-traded products (ETPs). This move marks a significant expansion for Bitwise into the European market and strengthens its position as a global specialist in crypto investment solutions.
The acquisition includes ETC Group’s entire suite of nine European-listed crypto ETPs, which collectively represent over $1 billion in assets under management. These products will be rebranded under the Bitwise name in the coming months, integrating into Bitwise’s broader offering of ETPs, hedge fund strategies, and separately managed accounts.
Overview of the Acquisition
ETC Group, founded in 2019, is known for its physically backed crypto ETPs. Its product lineup includes some of Europe’s most widely traded exchange-traded products, such as:
- BTCE: The largest physical Bitcoin ETP in Europe.
- ET32: An Ethereum ETP that incorporates staking rewards.
- ESOL: A Solana-based ETP.
- GXRP: An XRP-focused product.
- DA20: The MSCI Digital Assets Select 20 ETP, offering diversified crypto market exposure.
Each of these products is physically backed, meaning they hold the actual underlying cryptocurrencies, providing investors with direct and secure exposure to digital assets.
Strategic Implications for the European Market
This acquisition allows Bitwise to extend its services to European investors, offering them access to a wider range of innovative and regulated crypto investment products. Hunter Horsley, CEO of Bitwise, emphasized the company’s goal of building a “best-in-class global crypto asset manager.” He noted that the move supports Bitwise’s commitment to delivering sophisticated, professional-grade solutions to advisors, institutions, and investors worldwide.
Bradley Duke, Co-Founder of ETC Group, expressed confidence in Bitwise’s leadership and cultural alignment, highlighting the synergies between the two firms. The integration is expected to enhance product development, distribution capabilities, and client support across European markets.
Bitwise’s Growth and Product Expansion
With this acquisition, Bitwise’s total assets under management have surpassed $4.5 billion. The company has experienced remarkable growth throughout the year, driven largely by the successful launch of two major U.S.-listed products:
- Bitwise Bitcoin ETF (BITB): Launched in January, it quickly became one of the top 25 fastest-growing ETPs in history and currently holds over $2 billion in assets.
- Bitwise Ethereum ETF (ETHW): Introduced in July, it accumulated more than $300 million in assets within its first few weeks.
Bitwise also offers a diverse range of 20 investment products in the U.S., including the world’s largest crypto index fund, thematic equity ETFs, and customized portfolio solutions.
Understanding Crypto ETPs and Associated Risks
Exchange-traded products (ETPs) offer investors a convenient way to gain exposure to cryptocurrencies without directly purchasing or storing digital assets. However, it’s essential to understand that ETPs like BITB and ETHW are not registered under the Investment Company Act of 1940 and do not provide the same regulatory protections as traditional mutual funds or ETFs.
Investing in crypto ETPs involves significant risks, including high volatility, potential loss of capital, regulatory uncertainty, and liquidity challenges. Prospective investors should thoroughly review a fund’s prospectus and consider their risk tolerance before investing.
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Frequently Asked Questions
What does Bitwise’s acquisition of ETC Group mean for investors?
The acquisition allows Bitwise to offer European investors access to a broader set of regulated, physically backed crypto ETPs. It also enhances Bitwise’s global footprint and product diversity.
Will ETC Group’s products continue to be listed on European exchanges?
Yes. All existing ETC Group ETPs will remain listed on major European exchanges such as XETRA, Euronext, SIX, and Wiener Börse. They will be rebranded under the Bitwise name over the next few months.
Are these ETPs suitable for all types of investors?
No. Crypto ETPs are generally considered high-risk investments and may not be suitable for everyone. They are subject to market volatility, regulatory changes, and potential illiquidity.
How are physically backed ETPs different from synthetic ones?
Physically backed ETPs hold the actual underlying asset (e.g., Bitcoin or Ethereum), while synthetic products use derivatives to replicate price movements. Physical ETPs are often preferred for their transparency and direct exposure.
What is the significance of staking in Ethereum ETPs?
Some Ethereum ETPs, like ET32, incorporate staking mechanisms that allow investors to earn rewards on their held assets, potentially enhancing returns over time.
Where can I learn more about the risks involved?
It’s important to read the prospectus of any ETP before investing. Official fund websites and financial regulators provide detailed risk disclosures.
Looking Ahead
Bitwise plans to strategically expand ETC Group’s existing platform in Europe, introducing new products and services tailored to the needs of European investors. With its proven track record, industry expertise, and growing suite of investment options, Bitwise is well-positioned to play a leading role in the maturation of crypto asset management globally.
The company continues to focus on education, transparency, and innovation, serving as a trusted partner for financial advisors and institutions seeking exposure to the digital asset ecosystem.