The digital asset management firm Bitwise has officially filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) to launch a spot NEAR Protocol (NEAR) exchange-traded fund (ETF). This strategic move aims to bring institutional-grade, regulated exposure to the NEAR ecosystem through traditional brokerage accounts—offering investors a seamless gateway without the complexities of self-custody.
The proposed Bitwise NEAR ETF is structured as a trust and designed to track the value of NEAR tokens held in reserve, net of operating expenses and liabilities. If approved, it would become one of the first dedicated spot ETFs for the NEAR Protocol, joining Bitwise’s growing suite of crypto-based financial products, including its successful spot Bitcoin ETF, BITB.
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How the Bitwise NEAR ETF Works
At its core, the Bitwise NEAR ETF operates under a trust model, where the fund holds actual NEAR tokens on behalf of shareholders. The net asset value (NAV) of the trust will be calculated daily, reflecting the market price of the underlying assets minus fees and liabilities.
A key feature of this structure is the Sponsor Fee, which is deducted daily from the NAV and paid monthly in NEAR tokens. This innovative mechanism aligns incentives by tying operational costs directly to the performance and usage of the native asset. The sponsor—Bitwise—also covers routine expenses such as custody, auditing, legal services, and regulatory filings up to $500,000 per year.
In cases of extraordinary costs—such as those arising from regulatory challenges, major protocol upgrades, or legal disputes—the trust may sell or transfer a portion of its NEAR holdings to cover these expenses. This ensures financial resilience while maintaining transparency for investors.
Secure Custody and Asset Protection
Security remains a top priority. Coinbase Custody has been appointed as the primary custodian, responsible for safeguarding the NEAR tokens using cold storage infrastructure. While the assets are not FDIC-insured, they are protected under a comprehensive fidelity insurance policy specifically designed to mitigate risks associated with digital asset theft or loss.
Under normal operations, all NEAR holdings are stored offline. However, in exceptional circumstances—such as large-scale redemptions or urgent trading needs—the fund may utilize a system known as Agent Execution. In this model, a limited amount of NEAR can be held in hot wallets or pooled accounts on trusted trading platforms. This setup is strictly monitored and only activated when standard trading mechanisms are insufficient.
Should additional custodians be brought on board in the future, Bitwise plans to distribute holdings based on rigorous security assessments and insurance coverage levels—ensuring continued safety and diversification of custody risk.
The Growing Momentum Behind Crypto ETFs
Bitwise’s filing arrives amid a surge in cryptocurrency ETF applications. According to Bloomberg ETF analysts, 72 crypto-related ETFs are currently pending SEC review as of early May 2025. These span various structures and assets:
- Spot ETFs for Bitcoin, Ethereum, Solana, and now NEAR
- Futures-based ETFs offering leveraged or inverse exposure
- Staking yield ETFs aiming to capture passive income
- Proposals linked to meme coins like Dogecoin and even niche tokens like PENGU
This wave reflects increasing demand from retail and institutional investors alike for regulated, easy-to-access crypto investment vehicles.
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Regulatory Shifts Paving the Way
One of the most significant factors influencing this momentum is the evolving regulatory landscape. Following the departure of former SEC Chair Gary Gensler, new Chair Paul Atkins has signaled a more balanced and transparent approach to digital asset regulation.
Atkins has publicly emphasized the need for a stable, predictable framework that fosters innovation while protecting investors. His administration has prioritized clarifying rules around token classification, custody standards, and market integrity—key hurdles that previously slowed crypto ETF approvals.
This shift could accelerate decisions on pending applications, including Bitwise’s NEAR ETF. A favorable ruling would not only benefit NEAR investors but also set a precedent for other layer-1 blockchains seeking mainstream financial integration.
Why NEAR Protocol Stands Out
NEAR Protocol has gained traction as a high-performance, developer-friendly blockchain built for scalability and ease of use. Its proof-of-stake consensus, sharded architecture, and human-readable account names make it an attractive platform for decentralized applications (dApps), Web3 services, and enterprise adoption.
By launching a spot ETF, Bitwise is betting on NEAR’s long-term utility and growing ecosystem—which includes DeFi protocols, NFT marketplaces, AI integrations, and cross-chain bridges. Unlike speculative meme coins, NEAR offers tangible technological value, making it a strong candidate for inclusion in diversified portfolios.
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Frequently Asked Questions (FAQ)
Q: What is a spot NEAR ETF?
A: A spot NEAR ETF directly holds NEAR tokens in custody and tracks their real-time market price. This differs from futures-based ETFs, which rely on derivatives contracts rather than owning the underlying asset.
Q: Why does the sponsor pay fees in NEAR tokens?
A: Paying fees in NEAR aligns Bitwise’s interests with investors by creating ongoing demand for the token. It also reduces reliance on external funding sources and supports ecosystem participation.
Q: Is my investment insured if I buy shares in the Bitwise NEAR ETF?
A: While the underlying NEAR tokens are not FDIC-insured, they are protected by a robust fidelity insurance policy managed through Coinbase Custody, covering risks like theft or cybersecurity breaches.
Q: How does this compare to Bitcoin or Ethereum ETFs?
A: Like spot Bitcoin and Ethereum ETFs, this fund offers regulated exposure without requiring direct ownership. However, it targets a different segment of the market—investors who believe in NEAR’s technological advantages and ecosystem growth.
Q: When will the SEC decide on approval?
A: The SEC typically takes several months to review S-1 filings. A decision could come anytime between late 2025 and mid-2026, depending on regulatory priorities and public feedback.
Q: Can I trade this ETF like a stock?
A: Yes—once approved and listed on a national exchange, shares of the Bitwise NEAR ETF can be bought and sold during regular market hours through any standard brokerage account.
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Final Outlook: A Step Toward Mainstream Adoption
Bitwise’s S-1 filing for a spot NEAR ETF marks another milestone in the maturation of digital asset markets. By combining secure custody, transparent fee structures, and regulatory compliance, the proposal exemplifies how blockchain-native assets can be integrated into traditional finance.
With over 70 crypto ETFs awaiting review and signs of regulatory evolution under Chair Atkins, 2025 may prove pivotal for broader market access. For investors seeking exposure to high-potential layer-1 ecosystems beyond Bitcoin and Ethereum, the Bitwise NEAR ETF could soon offer a trusted, liquid avenue through familiar financial channels.
As institutional interest grows and infrastructure strengthens, products like this pave the way for sustained adoption—turning speculative digital assets into core components of modern portfolios.