What to know:
- Bitwise introduced third-party proof-of-reserves verifications for its spot bitcoin and ether ETFs.
- The process involves daily on-chain holdings verification, reconciling balances with the number of fund shares outstanding and replaces Bitwise’s prior practice of listing wallet addresses on its website.
- Bitwise plans to add a second layer of transparency in the coming weeks, with daily CPA-attested reports verifying asset balances and fund liabilities.
In this article
BTCBTC$117,457.24◢2.30%Crypto asset manager Bitwise said it is improving transparency for its spot bitcoin
and ether (ETH) exchange-traded funds, rolling out third-party proof-of-reserves verifications through U.S. accounting company The Network Firm.
Instead of publicly displaying almost 90 wallet addresses on its websites as was previously done, the current procedure now in operation has replaced this practice.
Rather than manually checking, The Network Firm plans to verify daily the on-chain holdings for both the Bitwise Bitcoin ETF (BITB) and Bitwise Ethereum ETF (ETHW). They will ensure these balances match with the number of shares outstanding by cross-checking, as stated in a recent post on X.
Over the next few weeks, the company intends to enhance its transparency by incorporating daily financial reports, which will be independently confirmed by certified public accountants (CPAs). These reports will not only verify the firm’s asset balances but also ensure accuracy in reporting of its liabilities.
In unison, these elements offer a clearer and more detailed view on transparency, as stated by the company.
To provide reassurance to investors that the funds are in line with commitments, an extra verification level is implemented. The practice of proof-of-reserve audits has gained traction in the crypto world following the downfall of FTX in November 2022, marking a significant trend in the industry.
The incident happened following the disclosure of a leaked financial statement that led to a rush withdrawal of funds from the exchange, exposing insufficient customer assets for its commitments. As a result, the adequacy of reserve holdings has become a significant issue for investors ever since.
Currently, Bitwise’s bitcoin exchange-traded fund is managing approximately $4.9 billion in total assets, which is significantly less than BlackRock’s iShares Bitcoin Trust (IBIT) that boasts a whopping $85.9 billion. Similarly, its Ether ETF manages only around $358 million compared to the sector leader’s $6.28 billion in assets under management. (SoSoValue data was used for this comparison.)
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2025-07-15 20:02