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yeah fair question. i'm currently exploring the multi institutional multisig custody model (have talked to the unchained folks about it for example). the tricky thing about this is that it's harder to answer questions like "who has control? who is the custodian?" in the regulatory sense etc. long term i think it's the right strongest security model but there's some ways to go for it to be well understood enough for it to be a practical solution for ETFs i think. that's my current thinking but trying to get sharper on it.

just on the note about coinbase. i get the frustration but it is also undeniable that they have the longest / best track record with the largest amount of bitcoin being custodied. they have a really strong security practice.

21 million?

every market open day where we have inflows / outflows (an AP comes to the trust and asks to create shares or redeem shares). when money comes in we go out and buy bitcoin. when money leaves we go out and sell bitcoin (hasn't happened to us yet!)

i hope so! we're doing our part publishing our bitcoin holding addresses for BITB and pushing the conversation. at least the other ETFs couldn't claim that it's not possible.

we prob won't build our own custody solution b/c since stuff like bernie madoff, it's very much expected from tradfi investors that the fund issuer shouldn't be the custodian as well since there's more room for fraud in that setting. a huge firm like fidelity ppl are fine with sine they trust apriori but a new firm like bitwise if we said we did self custody then many prospective investors would raise eye brows

centralization with coinbase custody isn't great but it is also undeniable that they have the longest / best track record with the largest amount of bitcoin. we're definitely open minded tho. over the long term i think a onchain multisig collaborative custody type model where multiple institutional custodians would need to be compromised at once for the bitcoin to be lost would be ideal. there's challenges to navigate in that world tho since "who is the custodian?" type things become harder to answer regulatory wise etc.

working with the SEC?

jokes aside, there's a lot of plumbing issues to get right. for example APs (authorized participants) are the ones that create and redeem ETF shares directly from the ETF itself and each of the entities (for us for example it's entities like goldman, jane street etc) you need to establish separate bi-lateral legal agreements etc. it's just a lot. and that's just one category of service provider you need for these to function.

copy pasting my answer from here: https://primal.net/e/note1e3zcfx5d2fmep258fp76km7stcfdhqyxdet9l7q4m2smkkc6uulsrdqmx6

notable features:

it really changes a lot b/c i also just play a non-CEO cofounder role which means you just take on whatever needs the most attention. but maybe the more steady CTO responsibilities are being involved with management of the eng team and just following things like protocol developments (current softfork discussions are fascinating for example) and things happening in the ecosystem (nostr & ecash are my two favorite things at the moment).

right on

they aren't immune to governments seizing it EO 6102 style if they wanted to. but at the same time i think they make such actions much less likely and much harder politically since now millions of more ppl and entities of all types are invested in bitcoin and they would be outraged by such a thing. honestly i feel much better about the "government bans owning bitcoin" attack vector these days than a few years back.

it wasn't b/c ppl really thought we'd runaway with the bitcoin or something like that (ultimately these are incredibly tightly regulated products, etc). but more so i pushed for it internally b/c i felt it was important for the ETFs as public vehicles getting a lot of attention to set the right example and demonstrate to the world that this isn't like gold where public transparency and secure custody are at odds. you can have both with bitcoin and that's a big deal. also post FTX i feel more strongly that we just need to keep moving norms this direction so that every honest actor by default has more transparency and as a result the bad actors are more easily identifiable

i do. not for everyone but for those who go down the rabbit hole or have a desire to be further self sovereign which fwiw can happen many years down the road after their first dabble into bitcoin via ETFs (or any other route for that matter). it is something investors ask for as well since a in-kind redemption would cause no tax event as well. a few gold ETFs have this feature too so it's possible. the SEC is not comfortable with this yet and this one feels like it might take a while to push them on this topic (but also we're not going anywhere! we worked at the bitcoin ETF application for 6 years with the SEC so we're not going anywhere and we'll continue to push)

good example is if you want 24/7 trading ability. you can only buy / sell bitcoin ETFs during stock market open hours.

hmm. hard one. this isn't one that ppl necessarily disagree with but the second order effect that i think ppl aren't seeing is that bitcoin ETFs will do wonders in fighting the discrimination bitcoin has been receiving in the US financial system.

for example broker dealers (regulated by FINRA and SEC) aren't allowed to custody bitcoin or really touch it in any way. SAB 121 is also a weird accounting rule that has been put out specifically targeting bitcoin and requiring extra reserves to be kept 1:1 if you hold bitcoin in anyway. this isn't like bitcoin asking for any type of special treatment. we're just looking for it to be treated equally as to everything else. it's been a hard battle for the bitcoin industry to push for this but since the bitcoin ETF the tradfi banking lobby has been pushing the SEC to get rid of these arbitrary road blocks to offering bitcoin services. the days these things are blocking bitcoin's path is numbered.

highly unlikely? we're in year 7 of running bitwise as a straightforward revenue generating business serving real people with real investing needs. no need to muddy that with a coin with no purpose

yessir

the 0 fee was up to 1B in assets and currently the AUM is around 1.8B so fr the 0.8B we are currently taking the fee. donation will happen annually (in Q1 each year after we close out the year end accounting). currently the three orgs we're committed to are opensats, brink, and HRF and they will be splitting the 10% of BITB profits equally

still waiting for that call lol

not likely for now. the whole point is that the wrapper makes it easy for tradfi brokerages to handle it (making it a token would revert it to something hard to handle)