Bitwise Become First To Disclose Bitcoin ETF Holdings Address

On Jan 24, Bitwise published the bitcoin address of its spot Bitcoin ETF (BITB) holdings, becoming the first bitcoin ETF provider to do so in the US. This is undoubtedly a welcomed change in a space that has previously been plagued with issues around the transparency of fund reserves.

In a subsequent post on X (formerly known as Twitter), Bitwise mentioned, “Publishing on-chain addresses is a first step toward increasing public transparency.” Continuing by adding that, “As infrastructure evolves, we hope to do more, such as working with firms like @hosekiapp to provide real-time cryptographic attestations.”

Given the Bitwise BITB ETF’s current position as the third largest spot bitcoin ETF by total assets held (over $490m, as of writing), according to BitMEX research, we can expect that this will have reverberations as a precedent other ETF providers will likely lean into to instil investor confidence moving forward. It also serves as an industry standard other digital assets spot ETF providers adopt for other digital assets outside bitcoin.

The BITB Holdings Bitcoin Address

Presently, anyone can go over to the Bitwise BITB site, grab the bitcoin address, and check it on a bitcoin explorer to directly verify the claimed value of the ETF’s bitcoin holding, which, as of writing, currently sits at around 12,338 BTC (~$492,661,703).

Following the announcement by Bitwise, Hoseki, a Bitcoin proof of funds infrastructure provider, mentioned in a post on X (formerly known as Twitter) that they are working with Bitwise to facilitate “new industry standards around Bitcoin reserve transparency.”

For those checking the Bitwise bitcoin address they may notice that there are no outflows from the address, and this is something that Bitwise CTO Hong Kim clarified in a post on X (formerly known as Twitter) that “Coinbase custody chooses to not reuse addresses after spends so the address would rotate after a spend transaction.” This means that if Bitwise has a net outflow day, they’ll transfer all funds to a new Bitcoin address and must update their website address list.

Nevertheless, we can expect to hear more from Bitwise over the coming months beyond Coinbase being their custodian regarding what setup they have opted for their bitcoin holdings, whether off-chain multisig, Shamir’s Secret Sharing (SSS), or Multi-party computation (MPC).

Interestingly, on a minor note, since Bitwise disclosed its address, it seems there have been relatively micro payments sent to the BITB bitcoins address, in what appears to be bitcoiners and other people “tipping” the BITB ETF.

Bitcoin Spot ETF Differentiation

Beyond expense ratios, to truly remain competitive, bitcoin ETF providers will look to differentiation by other means, including increasing their transparency by disclosing bitcoin addresses and real-time cryptographic attestations.

So far, Bitwise is adding to a growing list of what sets it apart from other ETF providers, starting with its commitment to directing 10% of its profits from its BITB ETF to supporting bitcoin development via sponsorship to the Human Rights Foundation (HRF), Open Sats, and Brink, to its disclosure of its bitcoin holdings address.

Further, proof of reserves will increasingly top the list of criteria against which investors compare spot ETFs and is, overall, a promising development in the bitcoin ETF ecosystem.