Bitwise Implements Third-Party Proof of Reserves for ETFs
- Bitwise partners with a third party for daily proof-of-reserves.
- Enhances transparency for Bitcoin and Ethereum ETFs.
- May strengthen institutional trust and investor interest.
Bitwise Asset Management has partnered with The Network Firm to introduce third-party proof-of-reserves for its Bitcoin and Ethereum ETFs, enhancing transparency through daily, external verifications.
This move reflects a growing emphasis on transparency and trust in cryptocurrency markets, potentially boosting institutional confidence amidst significant inflows into crypto ETFs.
Bitwise’s New Transparency Strategy with ETFs
Bitwise Asset Management adopts new transparency measures for its Bitcoin and Ethereum ETFs. Partnering with The Network Firm, the company aims to improve its proof-of-reserves process.
By implementing third-party verification and daily updates, Bitwise intends to boost transparency. This marks a shift from its previous approach of publishing wallet addresses on its websites.
Investor Confidence Expected to Rise
The introduction of third-party proof-of-reserves could significantly influence investor confidence. Bitwise’s initiative is expected to enhance transparency in the ETF sector.
This improvement aligns with investor expectations following past crypto market crises. The move might result in rising institutional interest in Bitwise’s ETF offerings.
DeFi Transparency Models Influence Bitwise
Historically, similar transparency efforts have been seen in DeFi protocols. Bitwise’s adoption of proof-of-reserves follows previous industry demands for greater visibility post-FTX. “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.”
Based on past trends, this adoption could foster increased market participation and trust. It mirrors ongoing efforts across the industry to safeguard investor interests.
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