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Bitwise's low-fee ETF bet: $238M day-one BITB inflows after SEC approval
A crypto asset manager built for the moment US regulators allowed a spot bitcoin ETF: Bitwise priced BITB lowest and won day one.
Bitwise Asset Management
What the business is
Bitwise is a crypto asset management firm, founded by Hunter Horsley and four years old in 2021, that runs index funds and exchange-traded funds for bitcoin and other digital assets; its flagship product is the Bitwise Bitcoin ETF (BITB), launched in January 2024.
How it started
In June 2021 Bitwise was a four-year-old crypto asset management firm raising a $70 million Series B from investors that included Stanley Druckenmiller and Bridgewater's David McCormick, with CEO Hunter Horsley telling Cointelegraph the firm served long-term investors thinking five to ten years ahead. Its assets under management had crossed $1 billion in February 2021, built on products like the Bitwise 10 Crypto Index Fund years before any US spot bitcoin ETF existed.
What happened
On 10 January 2024 the SEC approved proposals for eleven spot bitcoin ETFs, Bitwise's among them, after a years-long refusal of such products. Bitwise had prepared: it had seeded its fund with $500,000, cut its fee from 0.24% to 0.2%, and offered zero fees for the first six months or until $1 billion of assets. On the first trading day, 11 January 2024, BITB took in $238 million of inflows — the most of any issuer, ahead of Fidelity's $227 million and BlackRock's $111 million, in a $721 million pool across the new funds.
How it ended up
Bitwise also launched a spot ether ETF in 2024. By February 2025 BITB held nearly $4 billion in assets, the firm oversaw $12 billion in client assets with more than 100 employees, and it raised another $70 million from Electric Capital, MassMutual, Haun Ventures and MIT's investment office — the approval had turned a niche index-fund manager into a mainstream ETF issuer.
Background
Bitwise was a four-year-old crypto asset management firm when it raised a $70 million Series B in June 2021, with investors that included Stanley Druckenmiller and Bridgewater's David McCormick. CEO Hunter Horsley described the firm as serving long-term investors building a five-to-ten-year thesis, and its assets under management had crossed $1 billion in February 2021 — years before any US spot bitcoin ETF existed.
The regulatory door opened on 10 January 2024, when the SEC approved proposals for eleven spot bitcoin ETFs, Bitwise's among them. Bitwise had prepared for the window: it seeded its fund with $500,000, cut its fee from 0.24% to 0.2% — the lowest of the group at launch, with zero fees for six months or until $1 billion of assets — and had its registration in order as trading began the next day.
On the first trading day, 11 January 2024, BITB recorded $238 million of inflows, the most of any issuer, ahead of Fidelity's $227 million and BlackRock's $111 million, in a $721 million pool across the new funds on a day of $4.5 billion in trading volume. A small specialist had beaten the world's largest asset managers at their own game by being cheapest and ready first.
The launch scaled into a franchise: Bitwise added a spot ether ETF in 2024, and by February 2025 BITB held nearly $4 billion in assets while the firm oversaw $12 billion in client assets with more than 100 employees — after raising another $70 million from Electric Capital, MassMutual, Haun Ventures and MIT's investment office.
What has to be true
- Price was the wedge: Bitwise went lower than everyone — 0.2% with a six-month waiver — turning the launch into a fee story that put a small issuer ahead of BlackRock on day one.
- Preparation met the window: the fund was seeded and its registration effective the moment the SEC moved, so Bitwise could not be late to a market it expected to reach $72 billion within five years.
- The specialist brand fit the moment: after years running crypto index funds, Bitwise could sell itself as the pure-play manager just as BlackRock and Fidelity were entering the category.
- Day-one flows became durable proof: the biggest-first-day headlines gave BITB distribution momentum that carried it to nearly $4 billion in assets within a year.
What can be applied
When a regulator unlocks a product giants also want, price and preparation decide day one: Bitwise filed early, seeded its fund and cut fees first.
Aftermath
By February 2025 BITB held nearly $4 billion in assets and Bitwise oversaw $12 billion in client assets with more than 100 employees, having added a spot ether ETF in 2024 and filed for a spot XRP product; a second $70 million round brought in Electric Capital, MassMutual, Haun Ventures and MIT's investment office. The day-one lead did not make Bitwise the category's largest fund forever, but the SEC's approval turned a niche crypto index-fund manager into an ETF issuer competing with BlackRock, Fidelity and Grayscale on the same shelf.
Sources
- Bitwise secures $70M in Series B funding from major Wall Street investors
- SEC approves 11 spot bitcoin ETFs, with trading likely to start tomorrow
- What will it cost you to buy a bitcoin ETF? Here are the cheapest and most expensive funds
- Bitwise saw $238 million of inflows into spot bitcoin ETF on first day of trading, early data shows
- Spot bitcoin ETF issuer Bitwise raises $70 million, backed by Electric Capital, MassMutual and Haun Ventures
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