Bitwise, a professional crypto asset management firm, has submitted an application for a spot exchange-traded fund (ETF) based on Aptos. The filing was made on March 5, shortly after Bitwise established a trust for the Aptos ETF in Delaware. Through this filing, Bitwise aims to expand its offerings beyond Bitcoin and Ethereum ETFs.
What is Aptos – The So-Called ‘Solana Killer’?
Aptos is a layer-1 blockchain that was 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 cost-effective blockchain and gained the nickname ‘Solana killer’ due to its potential to compete with the popular Solana blockchain.
Despite the initial hype, Aptos’s market value is still considerably smaller than Solana’s. Aptos currently has a market capitalization of $3.8 billion, ranking it as the 38th largest cryptocurrency. In comparison, Solana’s market cap is approximately nineteen times larger.
Since its launch, Aptos has become the 11th largest blockchain in terms of total value locked (TVL). 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, allowing users to lock their tokens to contribute to network security and earn rewards. The blockchain also supports the tokenization of real-world assets. For example, 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 has 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 expected, as Bitwise had previously expressed its intention to file for the ETF by establishing a trust in Delaware on February 28.
However, the filing did not specify which stock exchange would list the Aptos ETF. Bitwise also did not provide 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 has chosen not to include a staking feature in the Aptos ETF. Staking is a fundamental aspect of Aptos’s blockchain, allowing users to lock their tokens and earn rewards. Instead, Bitwise has 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 may be aimed at simplifying the approval process with the SEC, which has been cautious about allowing staking features in ETFs. The SEC has previously expressed 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 offerings of crypto ETFs. 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, as Bitwise’s previous filings focused on top cryptocurrencies based on market capitalization. Aptos’s relatively lower rank raises questions about Bitwise’s strategy. However, it may indicate 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 may have influenced Bitwise’s decision to pursue an Aptos ETF in the U.S.