Bitwise CEO: Dogecoin ETF’s Demise Highlights Divergent Investor Preferences, AI and Solana Lead the Way
New York, NY – Hunter Horsley, co-founder and CEO of Bitwise Asset Management, has described the swift closure of the firm’s Dogecoin ETF as “tragic,” attributing its failure to a fundamental disconnect between the preferences of traditional ETF investors and cryptocurrency app users. This distinction, Horsley argues, explains why established digital assets have found greater traction in the ETF market.
The Bitwise Dogecoin ETF (BWOW), launched on the New York Stock Exchange in November 2023, is slated to cease trading on October 14th. Data from SoSoValue indicates that as of October 7th, the fund’s total assets under management stood at a mere $726,000, with monthly trading volume in September reaching only $51,000.
“I like Dogecoin, and I own Dogecoin,” Horsley stated. “I think it’s authentic in its positioning. Historically, it was a meme coin with no utility, but it represents a culture, and as an asset, it makes sense. But as an ETF, it just didn’t gain traction.”
In stark contrast, the Bitwise Solana Staking ETF (BBSOL) has seen significant success, accumulating $1.3 billion in assets under management. Horsley views this as investors betting on Solana’s ecosystem, recognizing its potential benefits from tokenization, stablecoins, and on-chain vaults.
Horsley’s observations on the BWOW’s performance point to a “delta” in behavior between ETF investors and crypto app users. ETF buyers, he explained, gravitate towards assets that have demonstrated market validation, while crypto app users are more readily swayed by emerging trends and community sentiment.
“ETF users just don’t want to put money into Dogecoin, but that could change over time,” Horsley remarked, pushing back against the notion that Bitwise misjudged its market positioning. He characterized crypto ETFs as a “pipeline” designed to grant traditional investors access to the crypto market, rather than a direct replication of crypto’s inherent risk appetite.
Horsley emphasized a symbiotic relationship between cryptocurrency and artificial intelligence, positing that crypto is reshaping financial services into software, while AI enables machines to perform tasks previously done by humans. As AI advances, he predicts, its preferred financial infrastructure will be “millisecond-level smart contracts, not bank tellers behind glass.”
The recently launched Bitwise NEAR ETF (NRR) exemplifies this intersection of AI and crypto. NEAR Protocol’s NEAR Intents feature allows users or AI agents to conduct cross-chain asset exchanges and transfers without the need for manual bridging. Horsley anticipates substantial growth for NEAR as AI agents gain greater financial capabilities.
Public filings reveal Bitwise’s strategic focus on AI, with applications submitted for two AI-related ETFs: the Bitwise AI Network Defense ETF in August and the Bitwise AI Bond ETF in September.
When asked for investment recommendations for the next five years, Horsley endorsed the Bitwise 10 Crypto Index ETF (BITW) and the Bitwise Crypto Innovators ETF (BITQ). His reasoning: “The lesson I’ve learned over the past few years is that the market is constantly changing. BITW today holds Hyperliquid, Zcash, and Uniswap. If the market shifts in the future, the fund will automatically adjust its holdings.”
