Summary BITB offers a unique way to gain Bitcoin exposure while supporting Bitcoin development through non-profit donations, differentiating it from other Bitcoin ETFs. BITB has maintained a top 5 position among US-based Bitcoin ETFs by assets under management, and generally trades close to its net asset value. Despite some short-term network development declines, Bitcoin's main layer activity and alternative uses like NFTs have shown positive long-term trends. I believe Bitcoin has not peaked this halving epoch; BITB is a sensible investment for those expecting further price appreciation, with strategic buys under $90k. Back in April, I initiated coverage of the Bitwise Bitcoin ETF ( BITB ) through Seeking Alpha with a 'buy' call and noted how the fund was slightly different from some of the other Bitcoin ( BTC-USD ) ETFs that were approved last January. In my closing Summary of that piece, I argued that BITB might actually be a way to buy BTC through the ETF wrapper while still staying moderately consistent with some of the philosophical principles Bitcoiners have historically adopted - namely, buying the fund shares can indirectly help decentralize the broader network: Ultimately, Bitcoin remains largely an anti-fiat trade. And despite there being an enormous amount of competition in the anti-fiat realm both in and out of crypto, BTC and its many proxies are probably still the fastest horses in that race. If one can accept holding Bitcoin with no less than three layers of intermediaries, than BITB might be one of the more principled options in the market as the company will be funding non-profit developers not named Blockstream. More specifically, a portion of revenue paid to Bitwise through the fund's management fee would be donated to further the development of Bitcoin through Bitcoin-focused non-profits Brink, OpenSats, and Human Rights Foundation. In this update, we'll briefly revisit the fund details and look at how the broader Bitcoin network has developed over the last few months. Fund Details & Objective BITB is one of roughly a dozen spot Bitcoin ETFs that were approved by the US Securities and Exchange Commission last January. With nearly a year of availability in the market, BITB has consistently remained a top 5 US-based ETF by assets under management. Fund Name Inception Expense Ratio AUM iShares Bitcoin Trust ETF ( IBIT ) 01/05/2024 0.12% $52.58B Fidelity Wise Origin Bitcoin Fund ETF ( FBTC ) 01/10/2024 0.25% $19.58B Grayscale Bitcoin Trust ETF ( GBTC ) 09/25/2013 1.50% $19.20B ARK 21Shares Bitcoin ETF ( ARKB ) 01/10/2024 0.21% $4.54B Bitwise Bitcoin ETF 01/10/2024 0.20% $3.85B Source: Seeking Alpha As of market close, January 8th, BITB is holding just under 40,794 BTC in the fund. The objective is quite simple, BITB offers traditional investors a straightforward, inexpensive way to get Bitcoin exposure in a traditional brokerage account or investment portfolio. In the year since the fund launched, it has generally traded within a few bps of net asset value: Premium/Discount (Bitwise) In 245 sessions last year, BITB traded at a discount 112 times and a premium 123 times. Through 5 sessions in 2025, BITB has traded at a discount 80% of the time. But it should be noted that this is a small sample size and the deviation from NAV has typically been very small. From a liquidity standpoint, BITB is generally in-line with the other top 5 spot ETFs with more than 3% of shares trading daily on average: Fund AUM Average Daily Dollar Volume Average % of Fund Traded Daily IBIT $52,580 $2,700 5.14% FBTC $19,580 $491 2.51% GBTC $19,200 $307 1.60% ARKB $4,540 $155 3.42% BITB $3,850 $126 3.29% Source: Seeking Alpha, author's calculations, $ in millions There are other spot Bitcoin funds that are bigger, slightly more liquid, and cheaper than the Bitwise Bitcoin ETF. Yet, BITB does offer a compelling selling point that similar funds lack; funding Bitcoin development through non-profit donations. Bitcoin Development and Usage For ten years, 10% of the profit Bitwise earns from managing BITB has been pledged to funding development of the Bitcoin network through Brink, OpenSats, and Human Rights Foundation. While the recipients of grants from each of these non-profit organizations can vary, they generally fund Bitcoin Core development, third-party wallet application developers, privacy-focused endeavors like GrapheneOS and The Tor Project, as well as various Nostr clients. Broadly, network development has been consistent over the last 4 or 5 years: Bitcoin Development (Santiment) 30 Day average contributor count has generally held firm between 45 and 55 going back to 2020. While the long-term trend is headed in the right direction, weekly development activity has declined sharply since November. This isn't necessarily unusual and we've seen similar development declines near the end of the year in the past as well. Scaling network growth hasn't been nearly as positive. Lightning Network Capacity (mempool) Bitcoin's Lightning Network growth has generally failed to live up to expectations. Not only has the BTC-denominated spending capacity of the network been flat at a little over 5k BTC for over two years, but channels have been in decline for nearly three years. There were 82k Lightning Network channels in March 2022. Today there are about 46k. Blockstream's other project Liquid isn't doing any better with just 3.8k BTC. To put this into context, there is about 15x the amount of BTC on Ethereum ( ETH-USD ) through the Wrapped Bitcoin ( WBTC-USD ) contract than is deposited to Liquid and Lightning combined. Bitcoin main layer activity growth has been a bit more interesting. Bitcoin 'L1' Transactions (Dune Analytics/cryptokoryo_research) I've covered the network activity on the Bitcoin blockchain regularly for Seeking Alpha over the last several months. But it has been a while since I've explored some of the alternative ways that the network is being utilized. Specifically, NFT projects like Ordinals and Runes. The combination of which have helped propel Bitcoin to the third largest NFT network by all time sales volume at $5 billion per data from CryptoSlam . However, even when factoring in the sporadic pops in transactions from BRC-20 tokens and Runes, main layer Bitcoin transactions have been down since October: Weekly (Artemis) Over the last five years, the general trend in weekly transactions has been very positive. More recently, that figure has fallen dramatically as the price of Bitcoin has risen. Bitcoin did 20.5 million transactions during the month of October. That number fell to 12.8 million in December. In my view, this is a clear indication that Bitcoin is being hoarded due to market expectations of further price rises. Perhaps strengthening that view is BTC supply migration away from centralized exchanges: BTC Exchange Supply (CoinGlass) CoinGlass tracks the aggregate balance from centralized exchanges like Coinbase ( COIN ) and Binance. The total BTC held through exchanges has fallen by almost 20% from 2.7 million BTC this time last year to just 2.2 million today. Risks Despite the market optimism, Bitcoin doesn't have the greatest looking chart at the moment: TrendSpider Bitcoin's daily chart shows RSI divergences going back to November. The coin has also given back the 50 day moving average and appears poised to go below $90k per coin for the first time in nearly two months. Furthermore, the fear and greed index is still very elevated at 69. In my view, it is very possible that what is widely expected to be a multi-year rally is taking a temporary breather. Worst case, Bitcoin's top is already in - though, to be clear, I don't hold that view presently. Summary As a fund, the Bitwise Bitcoin ETF is a fine way to speculate on price appreciation in BTC. BITB has decent liquidity and a highly competitive management fee. A portion of management's profits have been pledged to fund network development through Bitcoin-focused non-profit organizations for ten years. If you believe Bitcoin is going higher, my view is BITB is a perfectly sensible way to express that trade. The question then is whether or not each individual reader believes Bitcoin has peaked for this halving epoch. Personally, I don't believe that it has. That said, I also see a deeper short term pullback before a new high is made. I think dips under $90k BTC are buys. But I'd be strategic with those buys. It's been a long time since BTC has sniffed its 200 day MA.
