Notice2025-14547
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of a Proposed Rule Change To List and Trade Shares of the Bitwise Bitcoin and Ethereum ETF Under NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 1, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 146 (Friday, August 1, 2025)</title>
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[Federal Register Volume 90, Number 146 (Friday, August 1, 2025)]
[Notices]
[Pages 36217-36218]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14547]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103570; File No. SR-NYSEARCA-2025-15]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Approval of a Proposed Rule Change To List and Trade Shares of the
Bitwise Bitcoin and Ethereum ETF Under NYSE Arca Rule 8.201-E
(Commodity-Based Trust Shares)
July 29, 2025.
I. Introduction
On February 19, 2025, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to list and trade shares
(``Shares'') of the Bitwise Bitcoin and Ethereum ETF (``Trust'') under
NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares). The proposed
rule change was published for comment in the Federal Register on March
12, 2025.\3\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 102534 (Mar. 6,
2025), 90 FR 11855 (``Notice''). Comments received on the proposed
rule change are available at: <a href="https://www.sec.gov/comments/sr-nysearca-2025-15/srnysearca202515.htm">https://www.sec.gov/comments/sr-nysearca-2025-15/srnysearca202515.htm</a>.
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On April 24, 2025, pursuant to Section 19(b)(2) of the Act,\4\ the
Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\5\ On June 10, 2025, the Commission instituted proceedings
under Section 19(b)(2)(B) of the Act \6\ to determine whether to
approve or disapprove the proposed rule change.\7\ This order approves
the proposed rule change (``Proposal'').
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\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 102925, 90 FR 17985
(Apr. 30, 2025). The Commission designated June 10, 2025, as the
date by which the Commission shall approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
change.
\6\ 15 U.S.C. 78s(b)(2)(B).
\7\ See Securities Exchange Act Release No. 103215, 90 FR 25389
(Jun. 16, 2025).
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II. Description of the Proposal
As described in more detail in the Notice,\8\ the Exchange proposes
to list and trade Shares of the Trust under NYSE Arca Rule 8.201-E
(Commodity-Based Trust Shares). The Trust will hold both spot bitcoin
\9\ and spot ether.\10\
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\8\ See supra note 3.
\9\ Bitcoins are digital assets that are issued and transferred
via a distributed, open-source protocol used by a peer-to-peer
computer network through which transactions are recorded on a public
transaction ledger known as the ``Bitcoin blockchain.'' The Bitcoin
protocol governs the creation of new bitcoins and the cryptographic
system that secures and verifies bitcoin transactions.
\10\ Ether is a digital asset that is native to, and minted and
transferred via, a distributed, open-source protocol used by a peer-
to-peer computer network through which transactions are recorded on
a public transaction ledger known as ``Ethereum.'' The Ethereum
protocol governs the creation of new ether and the cryptographic
system that secures and verifies transactions on Ethereum.
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According to the Exchange, the investment objective of the Trust is
to seek to provide exposure to the value of bitcoin and ether held by
the Trust, less the expenses of the Trust's operations and other
liabilities.\11\ The Trust's allocation of its assets to bitcoin and
ether will approximate the relative market capitalization of bitcoin
and ether to one another.\12\ The Trust's only assets will be bitcoin,
ether, and cash.\13\ The Trust's net asset value (``NAV'') and NAV per
Share will be determined by the administrator of the Trust once each
Exchange trading day as of 4:00 p.m. E.T., or as soon thereafter as
practicable.\14\ For purposes of calculating the Trust's NAV, the
administrator will determine the price of the Trust's bitcoin and ether
by reference to the CME CF Bitcoin--New York Variant for its bitcoin
holdings and to the CME CF Ether--Dollar Reference Rate--New York
Variant for its ether holdings (the ``Pricing Benchmarks'').\15\ The
Trust will create and redeem Shares from time to time, but only in one
or more ``Creation Units,'' which will initially consist of at least
10,000 Shares.\16\
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\11\ See Notice at 11855. The Trust is a Delaware statutory
trust and will operate pursuant to a trust agreement between Bitwise
Investment Advisers, LLC (``Sponsor'') and Delaware Trust Company,
as trustee. Coinbase Custody Trust Company, LLC will maintain
custody of the Trust's bitcoin and ether. Bank of New York Mellon
will be the custodian for the Trust's cash holdings, the
administrator of the Trust, and the transfer agent for the Trust.
See id.
\12\ See id. As of the date of the filing, the relative market
capitalization of bitcoin and ether was 83% bitcoin and 17% ether.
The Exchange states that the Trust will calculate the market
capitalization of bitcoin and ether by multiplying the Pricing
Benchmarks (as defined herein) by the current circulating supply of
bitcoin and ether respectively, as determined by the Sponsor, and
will calculate the relative market capitalization by dividing each
of bitcoin and ether's market capitalization by the combined market
capitalization of both. See id. at 11855 n.9.
\13\ See id. at 11855.
\14\ See id. at 11856.
\15\ See id. at 11855. The Pricing Benchmarks are calculated by
CF Benchmarks Ltd. based on an aggregation of executed trade flow of
major bitcoin and ether trading platforms and are designed to
provide a daily, 4:00 p.m. E.T. reference rate of the U.S. dollar
price of one bitcoin or one ether. See id. at 11855 n.10.
\16\ See id. at 11857. Authorized participants will deliver only
cash to create Shares and will receive only cash when redeeming
Shares. See id.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the Proposal is
consistent with the Exchange Act and rules and regulations thereunder
applicable to a national securities exchange.\17\ In particular, the
Commission finds that the Proposal is consistent with Section 6(b)(5)
of the Exchange Act,\18\ which requires, among other things, that the
Exchange's rules be designed to ``prevent fraudulent and manipulative
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acts and practices'' and, ``in general, to protect investors and the
public interest;'' and with Section 11A(a)(1)(C)(iii) of the Exchange
Act,\19\ which sets forth Congress' finding that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for and transactions in securities.
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\17\ In approving the Proposal, the Commission has considered
the Proposal's impacts on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\18\ 15 U.S.C. 78f(b)(5).
\19\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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A. Exchange Act Section 6(b)(5)
The Trust will hold both spot bitcoin and spot ether weighted
according to their relative market capitalizations.\20\ The structure
of the Trust, the terms of its operation and the trading of its Shares,
and the representations in the Exchange's filing are substantially
similar to those of the spot bitcoin and spot ether exchange-traded
product (``ETP'') proposals approved in prior Commission orders.\21\ As
such, based on the record before the Commission, the Commission is able
to conclude that the Proposal is consistent with Section 6(b)(5) of the
Exchange Act.\22\
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\20\ See Notice at 11855. The Trust could also hold cash. See
id.
\21\ See, e.g., Order Granting Approval of a Proposed Rule
Change, as Modified by Amendment No. 1, to List and Trade Shares of
the Hashdex Nasdaq Crypto Index US ETF and Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment No. 1,
to List and Trade Shares of the Franklin Crypto Index ETF, a Series
of the Franklin Crypto Trust, Securities Exchange Act Release No.
101998 (Dec. 19, 2024), 89 FR 106707 (Dec. 30, 2024) (SR-NASDAQ-
2024-028; SR-CBOEBZX-2024-091) (``Spot Bitcoin/Ether ETP Approval
Order''). See also infra Item III.B.
\22\ The Commission received one comment letter supporting the
Proposal and stating that approving the Proposal would provide clear
benefits to investors while promoting fair, orderly, and efficient
markets. See Letter from Gregory E. Xethalis, General Counsel,
Daniel A. Leonardo, Chief Compliance Officer & Deputy General
Counsel, and Jay B. Stolkin, Deputy General Counsel, Multicoin
Capital Management, LLC, dated Apr. 29, 2025.
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B. Exchange Act Section 11A(a)(1)(C)(iii)
The Proposal sets forth aspects of the proposed ETP, including the
availability of pricing information, transparency of portfolio
holdings, and types of surveillance procedures, that are consistent
with other ETPs that the Commission has approved.\23\ This includes
commitments regarding: the availability of quotation and last-sale
information for the Shares; the availability on the Trust's website of
certain information related to the Trust, including NAV; the
dissemination of an intra-day indicative value by one or more major
market data vendors, updated every 15 seconds throughout the Exchange's
core trading session; the Exchange's surveillance procedures and
ability to obtain information regarding trading in the Shares; the
conditions under which the Exchange would implement trading halts and
suspensions; and the requirements of registered market makers in the
Shares.\24\ In addition, the Exchange deems the Shares to be equity
securities, thus rendering trading in the Shares subject to the
Exchange's existing rules governing the trading of equity
securities.\25\ Further, the listing rules of the Exchange require that
all statements and representations made in its filing regarding, among
others, the description of the Trust's holdings, limitations on such
holdings, and the applicability of the Exchange's listing rules
specified in the filing, will constitute continued listing
requirements.\26\ Moreover, the Proposal states that: the Trust's
Sponsor has represented to the Exchange that it will advise the
Exchange of any failure by the Trust to comply with the continued
listing requirements; pursuant to obligations under Section 19(g)(1) of
the Exchange Act, the Exchange will monitor for compliance with the
continued listing requirements; and if the Trust is not in compliance
with the applicable listing requirements, the Exchange will commence
delisting procedures.\27\
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\23\ See, e.g., Spot Bitcoin/Ether ETP Approval Order at 106709.
\24\ See Notice at 11862-64.
\25\ See id. at 11863.
\26\ See NYSE Arca Rule 8.201-E(e)(2)(vii).
\27\ See Notice at 11864.
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The Commission therefore finds that the Proposal, as with other
ETPs that the Commission has approved,\28\ is reasonably designed to
promote fair disclosure of information that may be necessary to price
the Shares appropriately, to prevent trading when a reasonable degree
of transparency cannot be assured, to safeguard material non-public
information relating to the Trust's portfolio, and to ensure fair and
orderly markets for the Shares.
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\28\ See Spot Bitcoin/Ether ETP Approval Order.
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IV. Conclusion
This approval order is based on all of the Exchange's
representations and descriptions in the Proposal, which the Commission
has carefully evaluated as discussed above.\29\ For the reasons set
forth above, the Commission finds, pursuant to Section 19(b)(2) of the
Exchange Act,\30\ that the Proposal is consistent with the requirements
of the Exchange Act and the rules and regulations thereunder applicable
to a national securities exchange, and in particular, with Section
6(b)(5) and Section 11A(a)(1)(C)(iii) of the Exchange Act.\31\
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\29\ In addition, the Shares of the Trust must comply with the
requirements of NYSE Arca Rule 8.201-E (Commodity-Based Trust
Shares) to be listed and traded on the Exchange on an initial and
continuing basis.
\30\ 15 U.S.C. 78s(b)(2).
\31\ 15 U.S.C. 78f(b)(5); 15 U.S.C. 78k-1(a)(1)(C)(iii).
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\32\ that the Proposal (SR-NYSEARCA-2025-15) be, and
hereby is, approved.
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\32\ 15 U.S.C. 78s(b)(2).
By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14547 Filed 7-31-25; 8:45 am]
BILLING CODE 8011-01-P
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