Bitwise's 10 Crypto Index ETF lost nearly half its net assets in six months, with Bitcoin's share rising to almost 78% as market losses and redemptions reshaped the fund's diversification strategy
Bitwise's 10 Crypto Index ETF, once promoted as a diversified way to access the digital asset market, ended the first half of 2026 with a dramatically altered portfolio and a much smaller asset base. According to the fund's latest SEC filing, net assets dropped from $1.03 billion at the end of 2025 to $532.8 million by June 30, reflecting a 48% contraction over six months. The decline was driven by both falling crypto prices and significant investor redemptions, leaving the fund more concentrated in Bitcoin than ever before.
Market Losses and Redemptions
The fund's net asset value per share fell 36.16% during the period, while the number of outstanding shares dropped by nearly 19%. Operational losses accounted for $339.4 million of the decline, including $430.7 million in unrealized depreciation and a $2.8 million net investment loss, partially offset by $94.1 million in realized gains. Meanwhile, capital-share transactions-primarily redemptions-reduced assets by another $157.7 million, as $161.2 million in shares were redeemed and only $3.5 million created. The ETF's share count fell from 17.45 million to 14.14 million, with redemptions processed through authorized participants in large blocks, a structure typical for exchange-traded products.
Bitcoin's Growing Weight
As the fund's asset base shrank, its exposure to Bitcoin increased. By June 30, Bitcoin represented 77.81% of the portfolio's equity, up from 75.11% at the end of December. Ethereum's share fell from 15.41% to 12.59% over the same period. The fund's composition also shifted, with Hyperliquid and Stellar entering the portfolio, while Avalanche and Polkadot dropped out. Bitwise attributes these changes to its rules-based monthly rebalancing process, which adjusts weights based on an index methodology, but the filing does not specify how much of the shift was due to market moves versus rebalancing or redemption-driven sales.
Concentration Risks and Investor Impact
The increased dominance of Bitcoin in the fund's holdings raises questions about the practical diversification offered by multi-asset crypto products, especially during periods of market stress. While the ETF's structure is designed to track a basket of ten digital assets, sharp declines in altcoin prices and investor withdrawals can leave the fund heavily tilted toward Bitcoin. This dynamic echoes broader trends in the crypto ETF space, where single-asset products have attracted the bulk of inflows, while multi-asset funds have struggled to maintain scale. As seen in other cases, such as when Tron's network absorbed billions in stablecoins despite overall market contraction, concentration risk remains a key consideration for investors seeking diversified crypto exposure. For more on how market structure can affect token concentration, see EgonCoin's coverage of Tron's stablecoin accumulation amid market shrinkage.
According to Bitwise's June 2026 filing, the ETF paid out $178.3 million in cash for redemptions during the first half of the year, a figure that includes both current and prior-period settlements. The fund's rules-based index methodology calls for monthly rebalancing, but the filing does not break down the relative impact of price changes, scheduled rebalancing, and redemption-driven asset sales on the portfolio's composition. The disclosures also do not indicate whether the fund's basket cushioned losses compared to holding Bitcoin alone, leaving open the question of whether diversification provided any material downside protection during the drawdown.
As of June 30, 2026, the Bitwise 10 Crypto Index ETF reported net assets of $532.8 million, down from $1.03 billion at the end of 2025. Bitcoin's portfolio weight rose to 77.81%, while Ethereum's share fell to 12.59%. The ETF's share count declined from 17,451,947 to 14,141,947 over the six-month period, with $161.2 million in redemptions and $3.5 million in new creations. The fund's principal market NAV total return per share was -36.16% for the first half of 2026, according to the company's SEC filing.
Multi-asset crypto funds like the Bitwise 10 Crypto Index ETF are designed to offer investors exposure to a range of digital assets, but their actual diversification can erode quickly during market downturns. When altcoins underperform or investors redeem shares, the portfolio may become increasingly concentrated in Bitcoin, which tends to hold value better than smaller tokens during broad selloffs. This concentration risk means that even products marketed as diversified may end up tracking Bitcoin's performance more closely than intended, especially in volatile or declining markets. Investors considering such funds should pay close attention to how rebalancing, redemptions, and market moves can reshape portfolio composition over time.
