The $1 billion digital assets manager said Wall Street-type clients are demanding more exposure to DeFi's biggest names.
Some analysts are optimistic while others prefer to see stronger signs of upside momentum before calling a bottom.
The Series B round values the firm at $500 million.
The ETF will aim to track Bitwise's list of top crypto firms and includes companies with $100 million or more of liquid crypto assets on their balance sheet.
If it succeeds, Bitwise would join Grayscale as the only crypto fund issuers to register their products as a public reporting company.
The asset manager's chief investment officer says institutional interest in DeFi tokens is ramping up.
The fund bets on 10 Ethereum-based protocols angling to shape the future of finance.
The fund aims to compete with Grayscale's Bitcoin Trust and others by offering a 50 basis point lower expense ratio.
The number of advisers allocating to crypto in client portfolios rose from 6.3% to 9.4% in 2020.
Bitwise, a provider of crypto index funds, said it has now surpassed $500 million in assets under management.
Crypto money manager Bitwise has liquidated $9.3 million worth of XRP in its crypto index fund.
Bitwise has launched the first crypto index fund available to investors in the U.S.
Latest rally extends bitcoin's lead over U.S. stocks in 2020 returns, potentially setting up a self-reinforcing trend as more investors take notice.
Cryptocurrency-focused money manager sees inflows from hedge funds, financial advisors and family wealth-management offices.
Record fiscal stimulus has pushed wealthy investors to invest in Bitwise's bitcoin fund as a means to hedge against inflation.