Bitwise Launches Chainlink ETF, Boosting Institutional Access to LINK

Bitwise has rolled out its new Chainlink exchange-traded fund (ETF), trading under the ticker CLNK on NYSE Arca. This move offers investors a regulated route to gain exposure to Chainlink (LINK) without directly holding the tokens. The approval of the ETF provides institutional investors with a convenient and secure way to add LINK to their portfolios through standard brokerage accounts. The fund, tracking the spot price of Chainlink, aims to simplify access for those looking to invest in digital assets through traditional financial vehicles.

The ETF comes with a 0.34% management fee, but it waives this fee for the first three months or until the fund reaches $500 million in assets. As part of its security measures, Bitwise has partnered with Coinbase Custody to store the Chainlink tokens in segregated institutional cold wallets. The fund’s net asset value is based on the CME CF Chainlink-Dollar Reference rate, ensuring it aligns with commodity indices used by regulated crypto ETFs.

Institutional Interest Grows in LINK Exposure

The Bitwise Chainlink ETF follows the introduction of Grayscale’s GLNK ETF, which sparked competition in the growing market for Chainlink ETFs. These products are slowly attracting institutional capital, signaling increasing interest in LINK. As of now, the cumulative investment in LINK ETFs stands at around $64 million, with total assets amounting to $88 million. Interestingly, while recent sessions showed no notable change in the inflow of capital, the lack of outflows indicates that institutions are holding their positions, a sign of long-term commitment.

Bitwise has indicated that it will not stake the assets in the ETF at launch. However, the company plans to file for the ability to stake the assets once it secures the necessary regulatory approvals. This approach lowers initial costs and minimizes risks associated with token custody, further enhancing the appeal for institutional investors. The absence of staking at the outset also gives the fund a more flexible structure, aligning it with traditional financial products.

Chainlink’s Price Reacts to ETF Launch

In line with the ETF’s rollout, Chainlink’s market price showed positive movement. LINK traded at approximately $14.25, up slightly from $14.04 in the previous session. The increase came after a sharp intraday reversal, where the price initially dipped below $13.90 before bouncing back. This resilience in the price movement highlights the confidence among investors, as many view the ETF as a signal of growing regulated access to cryptocurrency markets.

Market participants typically watch price action closely following the launch of ETFs, as it often reflects investor sentiment. The positive price movement of Chainlink is seen as a direct response to the improved access brought by the ETF, reinforcing the belief that regulated products like this can lead to price stability and growth.