Bitwise Files for Chainlink ETF With In-Kind Creation and Redemption

In brief

Bitwise has filed with the SEC for a Chainlink ETF that would directly hold LINK tokens, using Coinbase Custody as the custodian.
The ETF would offer in-kind creation and redemption, allowing investors to exchange LINK tokens directly for shares.
LINK traded around $24.27 following the news, down 1.1% amid broader crypto market weakness.

Crypto asset manager Bitwise has filed to offer a Chainlink ETF which would directly hold LINK, the oracle network’s native token, according to a new SEC filing.

The filing doesn’t yet include a prospective ticker, but does say that the tokens backing shares would be held with Coinbase Custody Trust Company. This is the same custodian used by many of the largest U.S.-listed crypto ETFs, including BlackRock’s iShares Bitcoin Trust and iShares Ethereum Trust.

The ETF would allow for in-kind creation and redemption, meaning that investors could buy shares with LINK and receive the token when they sell their shares. It’s only recently that the SEC began allowing crypto ETF issuers to offer in-kind creation and redemption.

In recent months, Bitwise has applied for ETFs tracking separately Solana, XRP, Dogecoin and Aptos. Its Bitcoin and Ethereum ETFs have generated $2.2 billion and $461 million in net inflows, respectively.

Decrypt reached out to Chainlink Labs and Bitwise, but did immediately receive a response.

Although LINK climbed as high as $24.70 early Tuesday morning, it’s since lost steam. At the time of writing, it’s changing hands for $24.27, about 1.1% lower than the same time yesterday, according to price aggregator CoinGecko.

Trading volume has dipped 14.3% in the past day to $3.8 billion, according to Coinglass. And open interest, or the value of open futures or options contracts, has fallen 5% in the past day to $1.7 billion.

The broader crypto market was awash in red. Earlier today, Bitcoin sank below $110,000 amid turmoil at the Federal Reserve. At the time of writing, Bitcoin was hovering around

In a report shared with Decrypt earlier this month, venture capital firm M31’s David Attermann wrote about the company’s bullish thesis for LINK, saying that “Chainlink’s footprint inside banks, market infrastructure, and leading crypto protocols creates high switching costs and a path to significant revenue.”