San Francisco-based asset manager Bitwise is joining the race to launch a regulated ETF for cryptocurrency, which if approved could help struggling bitcoin prices.
"The index's goal is to capture the most valuable assets that emerge," Hunter Horsley, co-founder and CEO of Bitwise Asset Management, told CNBC on "Fast Money" on Monday. "A lot of people think of it as an S&P 500 for crypto."
The U.S. financial watchdog has yet to approve a cryptocurrency-based ETF. Rumors that it could say yes to another application filed by money manager VanEck and SolidX as soon as August helped bitcoin break above the $8,000 mark this week.
“We’re joining the queue,” Matt Hougan, Bitwise global head of research told CNBC. “The market is professionalizing in a direction that the SEC would allow a crytpo ETF onto the market.”
Horsley said he doesn't think the SEC will be in a rush to approve a digital coin-based ETF, but said he is excited to talk to regulators about what his firm has to offer.
"I think [the SEC is] being cautious. That's their job and that's what we would hope they would do," he said and added that the "SEC, over the last two years, has demonstrated a great understanding of the [digital coin] space."
Exchange-traded funds usually track an index or group of assets but trade like stocks. While other companies, including VanEck, SolidX and Gemini, have filed for bitcoin-only ETFs, Bitwise is the first and only to apply for one that would track multiple digital assets.
In 2017, the SEC rejected an application by Cameron and Tyler Winklevoss, founders of crypto exchange Gemini. After VanEck and SolidX had their applications rejected, the two companies joined forces to file another version in June for an ETF to be called VanEck SolidX Bitcoin Shares. That version is under review, and rumors of its approval have added to investor optimism and bitcoin's 20 percent rebound this week.
Bitwise launched the the first crypto index fund in November, which is not registered with the SEC. That index is technically a private placement vehicle, which excludes retail investors and is meant for accredited investors with at least $1 million in liquid assets.
"Our clients like the index strategy," Horsley said. "Many of them have an investment view that's not specific to one coin. They think something promising could come out of public blockchains. A cryptocurrency may emerge and be really valuable."
The SEC and other regulators have been hesitant to approve bitcoin ETFs, mostly for security concerns. The agency has cracked down on cryptocurrency-related fraud in the past year, with a series of investor bulletins, stock trading suspensions and initial coin offering halts.
— CNBC's Kellie Ell contributed to this report.
WATCH: Bitwise CEO is optimistic on ETF approval