Bitwise: Building the Vangaurd of Crypto
Bitwise: Building the Vangaurd of Crypto
This week we discuss Bitwise — the powerhouse behind crypto’s fastest-growing ETP platform — and unpack how trusted, institutional-grade products are driving the next wave of digital asset allocation across Wall Street, wealth platforms, and beyond.
The Challenge isn’t Demand, It’s Infrastructure
Crypto has gone mainstream in headlines — but not yet in portfolios.
With a $3 trillion market cap, rising regulatory clarity, and a family of mainstream crypto spot ETFs, the path to institutional adoption is no longer theoretical — it's underway. (We put out a whole report on just this topic, if you’re interested… see here).
Yet even as interest soars, allocation lags. Financial advisors are leaning in. Institutions are engaged. But many still face the same challenge: the tools just haven’t kept up. The challenge isn’t demand. It’s infrastructure.
Investors need more than tokens. They need clean, compliant access to digital assets through products that fit within modern portfolio construction — tax-aware, liquid, custodied, auditable.
That’s what Bitwise was built for.
We first invested in Bitwise nearly 6 years ago now – long before the ETFs, before the wave of institutional inflows, before anyone was calling crypto “boring enough to allocate to.” When the firm was managing around $500m AUM. Even then, it was clear: Bitwise wasn’t chasing hype. It was building the financial architecture for crypto’s long game.
We followed on again earlier this year, alongside Electric Capital, Mass Mutual, Khosla, MIT, General Catalyst, Haun, ParaFi, and more – just as that thesis was going parabolic.
Today, Bitwise manages over $12 billion in AUM, serves more than 1,000 institutional clients, and is responsible for some of the fastest-growing ETPs in history. Their crypto index funds dominate the RIA market. Their research sets the tone for the category. And their approach — product-led, values-aligned, technically rigorous — is shaping how digital assets enter the financial mainstream.
Bitwise isn’t trying to be everything to everyone. It’s building the Vanguard of crypto — focused, disciplined, and relentlessly institutional.
Simplicity Wins
Crypto is still complex. Custody. Volatility. Gas. Compliance. Onchain vs offchain. Wallet management. It’s not that allocators don’t want crypto — they just don’t want to manage it like a developer.
Bitwise solves this by doing what great asset managers have always done:
Package complexity into clean, usable exposure
Wrap it in tax-efficient, liquid, and auditable structures
Distribute it with clarity, research, and trust
At the heart of Bitwise’s offering is the Bitwise 10 Crypto Index Fund (BITW) — a rules-based index tracking the 10 largest crypto assets, which has become a default way for advisors to enter the space. The simplicity is the point: monthly rebalancing, independent pricing, top-tier custody. BITW is the world’s first and largest crypto index fund:
Around it, Bitwise has built a portfolio of high-integrity, low-friction vehicles:
Thematic funds (NFTs, DeFi, Metaverse)
Crypto equities (miners, exchanges, infra)
SMAs and bespoke mandates for family offices
Yield products via staking and covered calls (Bitwise Onchain Solutions)
This is what adoption looks like: not speculation, but infrastructure.
I had the pleasure of interviewing Bitwise Chief Investment Officer, Matt Hougan, at our annual Blocktalk conference earlier this year, and as Matt said: “Bitwise isn’t just offering exposure. We’re offering confidence. And we stand behind the ETF with real research–when volatility hits, we’re the team your advisor can actually call.”
From First Mover to Market Leader
Bitwise isn’t just building products — it’s building the platform layer for crypto asset management. And 2024 was the breakout year.
In January 2024, the SEC approved the first spot Bitcoin ETFs — a long-awaited catalyst that triggered a wave of institutional participation. Bitwise wasn’t just prepared — it was leading. Within 60 days of launch, the Bitwise Bitcoin ETF surpassed $2.5 billion in assets, consistently ranking among the top in flows, trading volume, and spreads.
Today it sits at more than $4 billion.
But their edge wasn’t scale — it was precision. While larger issuers (like Blackrock, Fidelity and Invesco) leaned on legacy infrastructure, Bitwise executed with crypto-native fluency and institutional discipline.
“We’re the most crypto-native issuer in the ETF space,” as Hougan says. “We publish our wallet addresses so investors can verify the Bitcoin is there. But more than that — we’re building products designed to stand the test of time.”
Behind the products is a real machine:
A 20-person national distribution team focused specifically on RIAs and institutions
Custody and compliance infrastructure that meets institutional benchmarks
Wallet transparency and public auditability across all funds
Research output that sets the tone for the category
Bitwise has also expanded across vectors:
Geographically, via acquisition of ETC Group, the largest Bitcoin ETP provider in Europe
Vertically, via acquisition of Attestant, a top-tier Ethereum staking firm
Strategically, via launch of Bitwise Onchain Solutions to offer onchain yield at institutional scale
All of this is layered into a business model that’s refreshingly focused: no blockchain, no token, no protocol. Just modern investment products, delivered with discipline and clarity.
This isn’t just smart positioning either. It's essential infrastructure in a volatile, still-misunderstood category. That’s why more than 5,000 wealth teams, RIAs, family offices, and institutional clients in the U.S. and Europe use Bitwise products, along with more than 15 banks, broker-dealers, and platforms.
And it’s working: 99% of financial advisors who allocated to crypto via Bitwise in the past year are either holding or increasing their position.
A Longstanding Partnership
Our relationship with Bitwise began before any of this, though.
We’ve known the team for years now and participated in their $70m Series B round in 2021, after initially investing nearly 6 years ago. The series B in particular was a signal round, including a slate of deeply respected investors — Kleiner Perkins, Highland Capital, Elad Gil, Naval Ravikant, and Third Point among them. Not just capital, but conviction. And we saw a team with unusual clarity about where the market was heading — and the operational rigor to meet it there.
Since then, we’ve stayed close through cycles — through downturns, regulatory shifts, and macro whiplash. We chat with the team regularly and we’ve seen firsthand how Bitwise operates: methodical when others are reckless, visionary when others are reactive.
When the time came to double down earlier this year, we didn’t hesitate. The pitch was clear: persistent execution against a clear, compounding opportunity.
What Comes Next?
Crypto is becoming just another part of the investment landscape. That’s the goal. Not special. Not edgy. Just normal.
But to get there, we need firms that can make it feel that way — who can take the chaos of wallets, forks, gas, volatility, staking, and transform it into a structured, reliable, accessible experience. That’s what Bitwise is doing.
We believe every portfolio over the next decade will include digital assets. Some will enter through a Bitcoin ETF. Others through a smart crypto index. Some via tax-aware yield products, SMAs, or embedded staking. But they’ll all need the same foundation: trust, clarity, and product integrity.
Bitwise is building that foundation — and doing it with the kind of discipline, vision, and execution that defines category leaders. We’re proud to have partnered with them early, but even more excited for what comes next.
Author
Christopher Nelson
Head of Digital Asset Research