Bitwise: The Pioneer of Bitcoin Transparency – Why Are Others Still Silent?
Ever since Bitcoin became a strategic reserve asset for many corporations, the question of transparency in digital asset holdings has been a hot topic. In a space built on transparency and verifiability, the refusal of companies to disclose their Bitcoin wallet addresses raises many questions: Are they really holding the Bitcoin they claim to be holding, or is it just a marketing strategy?
To date, Bitwise remains the first and only company to have the courage to publicly disclose the Bitcoin addresses they hold in their spot ETFs – a symbolic move for financial transparency in the blockchain era.
Bitwise’s Transparency Breakout
On January 24, 2024, Bitwise made history by publicly disclosing the Bitcoin wallet addresses used in their spot ETFs. The move immediately caught the attention of the crypto community, especially those skeptical of large institutions’ claims of holding BTC.
In a world where Bitcoin transactions are publicly traceable, Bitwise leveraged the blockchain’s inherent transparency to bolster public confidence. They didn’t just say they owned Bitcoin – they showed it to the world.
Why didn’t other companies follow suit?
Bitwise seemed to be paving the way for a wave of transparency from other institutions, but nearly two years later, silence remains. Not a single Bitcoin ETF company or major BTC treasury holder has followed Bitwise’s lead.
Why?
Some possible reasons include:
Security concerns: Making wallet addresses public could increase the risk of being targeted by cyberattacks, especially if security measures aren’t strong enough.
Unclear financial strategy: Many companies may use cold wallets, multi-sig wallets, or third-party custodial solutions, making address disclosure more complicated.
Lack of industry standards: There is no common template for how or when to disclose wallet addresses, leading to hesitation.
Improvements for transparency?
Fred Krueger, co-author of “The Big Bitcoin Book,” has proposed improvements to the way addresses are disclosed. Instead of simply sharing an address, as Bitwise does, he suggests:
Cryptographic proof of ownership: A wallet address should be digitally signed to prove ownership, rather than simply providing an address.
Update addresses when there are movements: Due to frequent rebalancing and operations, companies need to disclose new addresses when assets move to maintain consistency and transparency.
Selective Disclosure: Krueger also cautioned against revealing too many addresses, in order to avoid theoretical risks from future threats like quantum computing.
Notably, Bitwise CEO Hunter Horsley himself shared Krueger’s post as a form of support and a willingness to accept criticism to raise the industry’s transparency standards.
Transparency is the future – but how far?
Bitwise’s move has set a new standard for transparency in the digital asset world. However, it is clear that most institutions are not ready to step out of their comfort zone.
If the traditional financial industry is going to digitize assets, transparency is inevitable. Disclosing wallet addresses is more than just a technical gesture – it is a commitment to investors, a declaration: “We really own what we claim.”
Meanwhile, Bitwise remains a pioneer – a company that has not hesitated to demonstrate its belief in Bitcoin, both in words and actions.
