Bitwise files for Chainlink ETF as competition for altcoin funds heats up

Bitwise Asset Management has taken a major step towards expanding institutional access to Chainlink ($LINK).

On 26 August 2025, the firm submitted a preliminary S-1 registration to the US Securities and Exchange Commission (SEC). It proposed the launch of the Bitwise Chainlink exchange-traded fund (ETF).

If approved, this ETF would give investors in the US a regulated way to gain exposure to LINK without directly buying or storing the token. 

This could open the door for more institutional involvement and potentially boost liquidity for Chainlink in the coming months.

Chainlink is a decentralised oracle network designed to connect blockchains with real-world data such as market prices, weather information, or other external feeds needed by smart contracts and decentralised finance (DeFi) applications.

According to the registration document, the trust’s goal is for its ETF shares to directly reflect LINK’s market value. 

Coinbase Custody Trust Company is proposed as the custodian, meaning it would securely hold the LINK tokens backing the ETF. 

Meanwhile, Coinbase, Inc. is set to act as the prime execution agent, handling the buying and selling of LINK on behalf of the trust.

Bitwise expects the ETF shares to list on a US national exchange, but the filing does not reveal which venue will host the listing.

The S-1 also outlines the ETF’s creation and redemption process. Shares can be issued and redeemed both in cash and in-kind. 

A mechanism called a “Trust-Directed Trade” will handle these transactions, with Coinbase managing the process as the prime execution agent. 

This flexible structure could appeal to large institutional investors seeking efficient ways to enter or exit LINK positions.

Interestingly, the filing makes it clear that the ETF will not involve staking LINK. While the SEC has recently clarified that staking does not necessarily breach US securities laws, Bitwise has chosen not to include this feature. 

There are no mentions of validator participation or staking rewards, indicating the ETF is designed purely to give investors direct exposure to LINK’s spot price.

Bitwise has previously established itself as a leading provider of crypto investment products. After successfully launching funds tied to Bitcoin and Ethereum, the company is now expanding into alternative tokens. 

The decision to focus on Chainlink reflects growing interest in infrastructure projects that underpin the next wave of blockchain adoption.

Rising competition in the crypto ETF space

Bitwise’s filing comes during an active period for crypto ETF proposals, especially for altcoins. Just days before, on 22 August 2025, Grayscale Investments submitted paperwork to convert its Avalanche Trust into a spot AVAX ETF.

Grayscale’s filing stands out because it includes a plan to stake up to 85% of its managed assets, allowing the fund to generate extra income from Avalanche’s proof-of-stake network. 

Bitwise, by contrast, has avoided staking in its Chainlink proposal, choosing a more conservative structure focused on price exposure only.

This difference highlights a wider trend: asset managers are taking varied approaches to designing crypto ETFs. 

Some are experimenting with income-generating strategies like staking, while others, like Bitwise, are sticking to simpler, pass-through products to reduce potential regulatory friction.

Bitwise’s Chief Investment Officer, Matt Hougan, has been openly optimistic about Chainlink’s role in the future of digital assets. In a July investor note, Hougan described LINK as one of the “cleanest” crypto assets on the market. 

He argued that Chainlink’s technology plays a critical role in enabling tokenisation and cross-chain data sharing, which could become a key driver for the next wave of blockchain adoption.

The market’s reaction to the filing has already begun. As of 26 August 2025, LINK trades at $23.30, according to CoinMarketCap. Over the past 24 hours, LINK’s price has dipped 5.22%, but its 90-day performance shows a strong 46.79% increase.

LINK currently holds a market capitalisation of $15.80 billion, giving it a 0.42% dominance in the overall cryptocurrency market.

On social media and crypto forums, investors have expressed cautious optimism. Many see the ETF as a step towards institutional adoption of Chainlink, though approval from the SEC remains far from guaranteed.

Chainlink Labs also weighed in on the broader issue of regulatory clarity, posting a statement on social media that underlined the company’s commitment to compliance:

“For the blockchain industry to reach its full potential and tap institutional capital, meeting regulatory requirements is essential. Only Chainlink provides the compliance, privacy, cross-chain, and data infrastructure needed to scale digital asset adoption in a single platform”, the company said.

Historically, ETFs for Bitcoin and Ethereum have led to spikes in trading volumes and increased institutional inflows. 

If the Chainlink ETF is approved, analysts believe a similar surge could occur, not just for LINK, but potentially for other tokens that interact with its ecosystem.

Regulatory shifts and market implications

Bitwise’s filing lands in the middle of a busy regulatory landscape, as the SEC faces a flood of crypto ETF applications.

One high-profile example is Grayscale’s proposal for a Cardano ETF, which has seen its approval deadline postponed to 26 October 2025. 

Initially submitted in February, the Cardano ETF has gone through several amendments, with the SEC even calling for public input earlier this year. 

The delay suggests ongoing caution as regulators assess the potential risks to investors and the broader market.

Meanwhile, Canary Capital Group has entered the race with a filing for the Canary American-Made Crypto ETF (MRCA). This ETF would track an index of digital assets with strong links to the US, focusing on tokens created, mined, or developed domestically. 

Importantly, the fund would exclude stablecoins, memecoins, and pegged tokens, concentrating instead on established projects like XRP, Solana, Cardano, Chainlink, Stellar, Avalanche, Hedera, and Sui.

The MRCA filing also proposes to stake proof-of-stake assets using regulated third-party providers, adding an income component to the fund’s structure. 

This approach would allow the ETF to offer exposure to selected tokens while simultaneously generating rewards from staking, which would be factored into its net asset value.

Industry analysts say the rise in altcoin-focused ETFs points to a turning point for regulated digital asset investing. Senior ETF analyst at Bloomberg, Eric Balchunas, observed that asset managers are “exploring every avenue to provide investors with different means of accessing the expanding crypto market”.

Adding to the momentum, the SEC has introduced a significant change to its review process. Starting in July 2025, the agency shortened its ETF approval timeline from 240 days to 75 days, meaning decisions could arrive much faster than in previous years. 

Even so, many proposals still face multiple rounds of revisions before reaching a verdict. For Bitwise, this shift could work in its favour. 

A shorter review cycle means that investors may not need to wait long to see whether the Chainlink ETF receives the green light. However, as past experiences with Bitcoin, Ethereum, and now Cardano ETFs show, delays are still common when regulators seek more clarity.

If approved, the Bitwise Chainlink ETF would represent a milestone for both the company and the broader crypto industry. 

It would give traditional brokerage clients access to LINK through a regulated, mainstream financial product, just as Bitcoin and Ethereum ETFs did in their early stages.

Until then, the market remains in a state of anticipation. With growing institutional interest and increasing competition among asset managers, the coming months are likely to play a pivotal role in shaping how digital assets like Chainlink integrate into regulated investment frameworks.