Bitwise, a crypto asset management firm, has filed for a spot exchange-traded fund (ETF) based on Aptos. The filing was made on March 5, just days after Bitwise registered a trust for the Aptos ETF in Delaware. With this filing, Bitwise is attempting to expand its offerings beyond Bitcoin and Ethereum ETFs.
What is Aptos — The So-Called ‘Solana Killer’?
Aptos is a layer-1 blockchain launched in October 2022 by Aptos Labs, a company founded by Mo Shaikh and Avery Ching. Both Shaikh and Ching are former employees of Facebook (now Meta). Aptos was designed to be a fast and low-cost blockchain, and it was even dubbed a “Solana killer” due to its potential to rival the popular Solana blockchain.
Despite the early hype, Aptos’s market value is still much smaller than Solana’s. Aptos has a market capitalization of $3.8 billion, making it the 38th largest cryptocurrency. In comparison, Solana’s market cap is about nineteen times larger.
Since its launch, Aptos has grown to hold the 11th largest total value locked (TVL) among blockchains. It has a TVL of $1.03 billion, with over $830 million of that amount held in stablecoins.
Aptos operates on a proof-of-stake system, which means users can lock their tokens to help secure the network and earn rewards. The blockchain also supports the tokenization of real-world assets. For instance, the Franklin OnChain US Government Money Fund (FOBXX) has been tokenized on the Aptos network, enabling traditional assets to exist as digital tokens.
Key Details About Bitwise’s ETF Application
Bitwise submitted an S-1 registration statement to the U.S. Securities and Exchange Commission (SEC) to list the Bitwise Aptos (APT) ETF. This move was anticipated, as Bitwise had previously indicated its intention to file for the ETF by registering a trust in Delaware on Feb. 28.
However, the filing did not specify which stock exchange would list the Aptos ETF. Bitwise also did not include details about the proposed fee or ticker symbol for the ETF. Before the SEC can make a decision, Bitwise must submit a 19b-4 form. The SEC will then have up to 240 days to review the application.
No Staking Feature Included
Interestingly, Bitwise chose not to include a staking feature in the Aptos ETF. Staking is a core aspect of Aptos’s blockchain, allowing users to lock their tokens to earn rewards. Instead, Bitwise named Coinbase Custody as the proposed custodian for the ETF. A custodian is responsible for securely holding the assets that back the ETF.
This decision might be aimed at simplifying the approval process with the SEC, which has been cautious about allowing staking features in ETFs. The SEC has previously raised concerns about the complexity and risks associated with staking in crypto investment products.
Bitwise Is Expanding Its ETF Portfolio
The Aptos ETF is part of Bitwise’s strategy to expand its crypto ETF offerings. Bitwise already manages spot ETFs for Bitcoin (BTC) and Ether (ETH) in the United States. In recent months, it has also filed for spot ETFs based on Solana (SOL), XRP (XRP), and Dogecoin (DOGE).
The decision to file for an Aptos ETF is unusual since Bitwise’s previous filings focused on top cryptocurrencies by market capitalization. Aptos’s relatively lower rank raises questions about Bitwise’s strategy. However, it may suggest that the firm sees untapped potential in Aptos’s technology and ecosystem.
Bitwise is not new to Aptos. In November, the firm launched an Aptos Staking ETP on Switzerland’s SIX Swiss Exchange. This product offers a 4.7% return for users who stake their Aptos tokens. This previous involvement with Aptos might have influenced Bitwise’s decision to pursue an Aptos ETF in the U.S.