Bitwise stacks up with the biggest players in bitcoin ETF race

The big picture: The San Francisco-based shop started in 2016 just debuted its fund, BITB, alongside nine new, virtually identical ETFs last month.

• It is fourth in terms of assets under management, excluding Grayscale's converted trust GBTC, trailing only BlackRock, Fidelity, and ARK 21Shares.
• It also had the biggest inflows as of Jan. 12 — that first week of approval — a short-lived flex as others caught up, but a flex nonetheless.

"Investors are choosing us because they want to be working with the specialist," CEO Hunter Horsley tells Axios.

• BITB is the lowest-cost ETF with over $1 billion in assets, he said, rattling off the "whys" of choosing it.
• It has a penny-wide bid-ask spread, is trading efficiently, and is the only one with published wallet addresses, so its holders can see where it all is — a crypto-native touch that cost nothing. (The opposite, actually, it inspired folks to send Bitwise BTC or something else for nothing.)

Part of its appeal also comes from the firm always being on-message.

• "Public blockchains and bitcoin are some of the most interesting and potentially compelling technology developments of the next two decades," Horsley says.
• That's a not-so-subtle reference to the firm's recently aired television ad featuring the Dos Equis guy, but he sounds earnest. (The man who slings beer > the one on the barstool.)

But its work began long before cash started flowing into any ETFs last month.

• Bitwise was among the early spot bitcoin ETF applicants and was denied more than once.
• It and Fidelity were tactful in dealing with the SEC, asserting academic arguments to address the regulator's concerns, though, it took a legal one to finally crack the agency after a decade of rejections.

State of play: Last week, BITB got picked up by Carson Group, an RIA network managing between $30 billion and $40 billion in the U.S., on behalf of over 40,000 families.

• Carson is a Barron's ranked adviser.
• Bitwise also just signed a much larger RIA, though Horsley declined to name it.

Behind the scenes: Independent advisers can be more nimble than banks and broker-dealer platforms that have to jump through internal hoops before deciding on offering access, he said.

• Horsley says BITB is also gaining traction with mutual funds and hedge funds, portfolio managers who buy ETFs to express an investment opinion — like consumer staples over tech stocks, say, or large-cap companies vs. small-caps.

What we're watching: Now, performance matters. "People get that we can be a very capable and trustworthy steward. We avoided the blowups of 2022. We avoided the ICOs back in the day and we've managed portfolios through moments of market stress," he said.

The bottom line: "Being able to say that we've done that for a very long period of time is the goal," Horsley says.

Go deeper: The bitcoin ETF saga