Bitwise Breaks Ground with First-Ever Spot Chainlink ETF Application
- Bitwise filed a preliminary prospectus for a Chainlink ETF during a period of regulatory delays.
- The ETF could expand institutional exposure to Chainlink’s decentralized oracle network.
Bitwise Investment Advisers has filed a preliminary prospectus of a Chainlink (LINK) spot exchange-traded fund (ETF). The listing comes as other altcoin ETF applications are being slowly processed by the U.S. Securities and Exchange Commission (SEC), yet funds are unwilling to admit defeat.
The filing, submitted as an S-1 prospectus, is a cash-settled Chainlink ETF in which Coinbase Custody is the token custodian. Although the Trust retains the right to settle with investors in cash and in-kind, the overall industry practice is cash settlement, which is simpler than wallet management and self-custody.
The news temporarily reversed the correction, and LINK restarted its rise toward the $24 mark after earlier losses. As of this writing, LINK rose to $24.16, which is 4.39% higher than LINK on the day, according to CoinGecko. Spot trading turnover decreased by 14.3% to $3.8 billion, with futures and options open interest declining by 5% to $1.7 billion accordig to Coinglass data.
The filing also came shortly after the SEC extended its review of WisdomTree and during a larger backdrop of revaluation of securities after the use of spot Bitcoin and Ethereum ETFs. Analysts have reported that the case is gaining steam toward single-token altcoin products.
Expanding Institutional Exposure Beyond Bitcoin and Ethereum
The filing follows other proposals by Bitwise to list ETFs focusing on Solana, XRP, and NEAR. The inclusion highlights the plan of providing investors with regulated exposure to tokens that fuel the blockchain infrastructure, as opposed to focusing on speculative demand.
Eric Balchunas, senior ETF analyst at Bloomberg, Stocking pointed to the move’s significance, as it allows institutions to obtain regulated access to decentralized oracle technology more easily. The addition to the index signals the lofty position among U.S.-based crypto assets by market capitalisation and its prominence in real-world asset (RWA) tokenization initiatives.
The Grayscale Chainlink Trust is the only major investment vehicle dedicated to LINK. It has approximately $29 million in assets. Trust has traditionally faced poor liquidity and constant breaches of market value. An ETF would potentially fill those gaps by providing a more efficient price tracking and a more liquid secondary market.
Chainlink’s Growing Role in Blockchain Infrastructure
Chainlink was launched in 2019 as a decentralized oracle network that connects blockchains with real-world data. Its oracles enable trillions of dollars of smart contract value in DeFi, non-fungible tokens, games, and enterprise applications.
The network hosts thousands of projects and provides key services, including price feeds, random number generation, and cross-chain interoperability. The native token, LINK, plays an important role in rewarding node operators and securing oracle services, which makes LINK have a practical use besides speculation.
The open interest in LINK derivatives has recently jumped to nearly $900 million and then leveled off, representing a combination of speculative trading and increased institutional interest. The proposed Chainlink ETF would be the first such effort in the United States to route institutional funds into an oracle network token directly.
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