Summary Bitwise 10 Crypto Index Fund (BITW) is rated Sell due to high fees and high correlation with bitcoin and persistent underperformance versus bitcoin. BITW’s 250bps expense ratio is difficult to justify, given its 97% correlation with bitcoin and limited value from smaller altcoin holdings. Portfolio concentration is high: bitcoin comprises 74.7% and Ethereum 14.8%, with smaller coins contributing little to performance while adding substantial risk. Given underperformance, high fees, and excess risk, a bitcoin spot ETF like IBIT is preferable for most investors seeking crypto exposure. The Bitwise 10 Crypto Index Fund ( OTC:BITW ) is a diversified cryptocurrency investment strategy designed to provide investors with exposure to the top 10 cryptocurrencies by market capitalization. BITW can potentially be utilized by investors seeking a diversified portfolio of cryptocurrencies; however, the vast majority of assets are allocated to bitcoin, resulting in near-perfect correlation between BITW and bitcoin. Given the relative underperformance when compared to the historical performance of bitcoin and the challenging market dynamics in the cryptocurrency market, I am recommending BITW with a Sell rating. About Bitwise 10 Crypto Index Fund BITW was launched on November 22, 2017 as a Trust with Bitwise Investment Advisers as the Sponsor of the Trust. The Trust was later brought to the public markets on December 9, 2020 on the OTCQX Exchange. The Trust was converted to an exchange-traded product following SEC approval on November 18, 2025 and is now listed on the NYSE Arca Exchange. BITW was designed to track the Bitwise 10 Large Cap Crypto Index, which is administered by Bitwise Index Services. The Index was designed to track the top 10 largest cryptocurrencies by market capitalization, which captures an estimated 75% of the total market capitalization of the cryptocurrency market. The Index is reconstituted monthly, and in turn, the ETF is rebalanced on a monthly basis. BITW has a net expense ratio of 250bps, a relatively high fee when compared to peer cryptocurrency portfolio strategies. Despite offering a diversified cryptocurrency portfolio, investors must weigh whether the differentiated returns over bitcoin provide enough value to justify the relatively high management fee. Seeking Alpha Looking through the portfolio, BITW is largely concentrated amongst the top holdings with bitcoin weighted at 74.7% and Ethereum at 14.8%. Given that portfolio weightings are dictated by market capitalization, smaller large-cap coins may be less represented in the portfolio, and thus, less influential to the value of the fund. Corporate Filings Looking at the performance of the portfolio, many of the smaller coins have significantly underperformed bitcoin in 2025 with bitcoin returning -6% year-to-date. In addition to this, BITW has substantially underperformed bitcoin across all historical holding periods, raising the question as to whether an investor needs to diversify across crypto assets or whether a simple investment in bitcoin will suffice. TradingView The cryptocurrency has experienced a cascading effect in recent months, potentially driven by the imbalance between fund inflows & outflows. This is a factor that may influence the price and flows of bitcoin, particularly as more retirement accounts include an allocation to bitcoin funds. Prior to the approval of bitcoin spot ETFs in January 2024 , bitcoin had a limited investor pool given the necessity for an additional brokerage account or limited options for investment vehicles. A major change that came with the emergence of bitcoin spot ETFs was the addition of advisory operations, which includes portfolio rebalances, cash raises, and charitable giving, amongst other features, adding risks that had previously not impacted bitcoin. I believe bitcoin may be exceptionally exposed given the liquidity and trading depth of the underlying asset, allowing for an appealing vehicle for capital raises. CoinGlass Another driving factor in the cryptocurrency market is the use of leveraged funds. Accordingly, over $1t in market capitalization has been wiped out since October 2025 with the price of bitcoin falling by nearly -35% from its high in October 2025 before recovering some ground. Much of the price decline was driven by investors unwinding leveraged bitcoin strategies, which are estimated to be in the range of $19-30b on October 10, 2025. TradingView Though I believe a small 1-2% allocation to cryptocurrency is appropriate for a diversified investment portfolio, investors must consider the amount of risk they are willing to take on by diversifying into smaller tokens held in BITW, such as Polkadot ( DOT-USD ) or Avalanche ( AVAX-USD ). Given the relative performance of the diversified portfolio when compared to bitcoin, investors must weight whether diversifying into riskier assets is appropriate. Overall, I believe investing in a bitcoin spot ETF like the iShares Bitcoin Trust ETF ( IBIT ) will provide appropriate coverage in the cryptocurrency market, at least for the average investor. Given the additional risks, volatility, and relatively smaller positions of alternative coins, BITW may expose investors to more market risk than is necessary for cryptocurrency exposure. Risks Related to BITW BITW provides investors with a diversified portfolio strategy for investing in alternative coins, presenting certain risks that must be considered prior to making a final investment decision. Smaller cryptocurrencies may expose investors to significant volatility that may add unwanted risk to one’s portfolio. BITW is heavily concentrated in bitcoin and Ethereum and is heavily correlated with bitcoin at 97%, potentially exposing investors to greater risk and a higher management fee without a substantial amount of value being derived from the alternative coins held. Corporate Filings Final Thoughts BITW provides investors with diversified exposure across the top 10 cryptocurrencies by market capitalization, differentiating exposure from bitcoin spot ETFs. Given the relative correlation of BITW to bitcoin, I do not believe that the ETF differentiates exposure enough to justify the high management fee, particularly given that the fund has underperformed bitcoin by a wide margin since inception. Given these factors, I am recommending BITW with a Sell rating.
