Bitwise CIO is ‘excited’ for the product exposure to Ethereum DeFi.

Cryptocurrency asset management firm Bitwise is interested in offering an exchange-traded product (ETP) covering Ethereum's Layer 2 networks and applications, according to the company's chief investment officer.

“I'm kind of embarrassed and excited that Bitwise doesn't have it, because I think that's a great product,” Matt Hugan said in an interview with Forbes published on March 31.

Hugan said he has “extraordinary faith” that the Ethereum ecosystem will evolve, but which Layer 2 and applications will rise to the top is still up in the air.

“I have a hard time imagining what the future will look like three years from now when there are a hundred popular real-world decentralized applications that people are using and the economy is flowing,” he says.

“So the best way to approach that is to own it all, which is going to be a good product for the price.”

Hugan also reiterated that the market is overestimating the need for a Denko reform by a factor of 10 or 20.

It's a complete game changer, and I think the market hasn't realized that.

Let's hope for Ether ETFs in December

Meanwhile, Hugan expressed concern that the market may not be ready for an Ethereum exchange-traded fund (ETF) in May, and hopes that the US securities regulator will approve it by December.

“It's hard to get financial advisors to think about Ethereum right now” because TradFi is still churning out recently approved Bitcoin ETFs, Hougan said.

“If you shove it down their throats in May, I'm not sure they will. [ready]” emphasized Hugan.

“Part of me is hoping it's December or something like that because I think that would be better for the market.”

Bitwise filed Forms S-1 and 19-b4 with the SEC on March 28 to list the Place Ether ETF.

BlackRock, VanEyck, ARK 21Shares, Fidelity, Grayscale Hashdex, Franklin Templeton and Invesco Galaxy are among the other applicants vying for SEC approval for spot ether ETFs, and many analysts expect May to be a key time for a possible mass approval.

Related: 3 Theories Why the SEC May Be Looking at Ethereum: Crypto Lawyer

However, with some analysts citing the SEC's reluctance to engage with applicants in recent months, the odds for spot ether ETF approval continue to fall.

But not everyone agrees. Last week, Grayscale Chief Legal Officer Craig Salm discussed common issues distinguishing ether ETFs from spot Bitcoin ETFs — such as details of creation and redemption processes, cash and cash models, asset protection, loss prevention and retention.

Bitwise is one of 11 Spot Bitcoin ETF issuers. Its Bitwise Bitcoin ETF (BITB) has collected more than $1.6 billion in inflows — fourth behind BlackRock IBIT, Fidelity's FBTC and Ark 21Shares' ARKB, according to BitMEX Research, citing March 28 data.

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