Bitwise

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Bitwise
Bitwise logo.png
Founded 2017
Headquarters San Francisco, California
Key People Hunter Horsley, CEO
Products Bitcoin index funds
Twitter @BitwiseInvest
Website Bitwise Homepage
Blog Bitwise Blog

Bitwise Asset Management ("Bitwise") is a cryptocurrency asset advisory and management firm. It also creates indexes and has partnered with Morgan Creek Digital, another digital asset-focused investment manager.

On July 24, 2018, Bitwise filed an application to the U.S. Securities and Exchange Commission to register a bitcoin exchange traded fund (ETF) to be listed for trading on Intercontinental Exchange Group Inc.'s NYSE Arca Inc. exchange.[1] As of late January 2019, Bitwise's application for registration was still pending at the SEC, along with a number of other bitcoin ETF registration applications.[2]

Fake cryptocurrency trading volume report

NYSE Arca filed an application to trade a Bitwise Bitcoin ETF on January 28, 2019, and the SEC published the application in the Federal Register for 45 days of public comment on February 11, 2019.[3] In support of the application, Bitwise attended a meeting on March 20, 2019, with SEC staff members during which it provided the results of a study of exchange trading of bitcoin. According to Bitwise, approximately 95 percent of global reported trading volume comes from suspect sources. The study concluded that the trading volume data from the following ten exchanges are reliable: Poloniex, Kraken, Binance, Bitfinex, Bitstamp, ItBit, Coinbase, Gemini and Bitflyer.[4] The study is available here. Other contemporaneously issued studies produced by the research firms Crypto Integrity and The TIE concluded that 88 percent and 75 percent of reported exchange trading data were suspect.[5]

Binance CEO Changpeng Zhao responded to the report by replying to Bitwise's Twitter post about it. He said it was an "excellent report," but that "sadly, most investors who can't tell real vs fake volumes won't read such a detailed report." Binance was acknowledged by Bitwise to be the largest bitcoin exchange to meet its standards for reporting "actual volume." This sparked an intense argument over Twitter that included Larry Cernak and Frank Chaparro from The Block, a crypto-centric news site. Chaparro accused Zhao of having an ego "so tiny and fragile that constructive criticism, critical reporting, is viewed as 'attacking' and 'not being positive'." Chaparro also told Zhao to "get a spine."[6]

On March 29, 2019, CoinDesk published an article taking aim at Bitwise's report in which it noted that two of the "good" exchanges identified by Bitwise, Binance and Bitfinex, were themselves suspect primarily because of their inability to secure stable banking relationships.[7]

Bitwise, the Term

Bitwise is also a standard computer sciences term that has nothing to do with bitcoin or other cryptocurrencies. Bitwise refers to logical operations between two bits of data. Bitwise is a level of operations that involves working with the smallest units of data, the individual bits. Bitwise operations include "and," "or," "and/or," etc. [8]


References