10-K: Bitwise Chainlink ETF Launches, Waives Fees on First $500M

Bitwise Chainlink ETF (CLNK) has commenced trading on NYSE Arca, offering investors exposure to Chainlink, with a temporary fee waiver on initial assets.

Summary

• The Bitwise Chainlink ETF (CLNK) is an exchange-traded product designed to provide exposure to the value of Chainlink, less operational expenses.
• The Trust's primary investment objective is to hold Chainlink and value its net assets daily based on the CME CF Chainlink-Dollar Reference Rate New York Variant (Pricing Benchmark).
• Bitwise Investment Advisers, LLC (the Sponsor) manages the Trust, which is passively managed and does not engage in active trading or hedging strategies.
• The Sponsor Fee is 0.34% per annum of the Trust's Chainlink holdings, but it is waived on the first $500 million of Trust assets for a three-month period starting January 14, 2026.
• Coinbase Custody Trust Company, LLC serves as the Chainlink Custodian, utilizing cold storage for security, while BNY Mellon acts as Administrator, Transfer Agent, and Cash Custodian.
• Shares are created and redeemed in blocks of 10,000 (Baskets) with Authorized Participants, either in-kind for Chainlink or for cash.
• The Trust does not currently engage in staking but intends to do so in the future as a secondary investment objective, which will involve Staking Agents and Staking Expenses.
• As of December 31, 2025, the Trust had minimal operations, with 8 Seed Shares outstanding, a net asset value of $200, and a NAV per Share of $25.00.
• Subsequent to the fiscal year-end, the Trust's registration statement became effective on January 7, 2026, and shares were listed on NYSE Arca on January 14, 2026.
• Bitwise Investment Manager, LLC, an affiliate, purchased 100,000 shares for $2,500,000 on January 13, 2026, and sold them on January 14, 2026.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive, reflecting the successful launch of a new digital asset ETF with competitive fees and robust custody, but tempered by the inherent volatility and regulatory uncertainties of the Chainlink market.

Positives

• The Sponsor has waived the entire 0.34% annual Sponsor Fee on the first $500 million of Trust assets for a three-month period, reducing initial costs for investors.
• The Trust employs robust security measures for Chainlink custody, including multi-layer cold storage, private key encryption, and whitelisting, managed by Coinbase Custody.
• The Trust offers investors a regulated and traditional brokerage account access to Chainlink, bypassing direct acquisition and custody complexities.
• The Sponsor assumes and pays for most normal operating expenses of the Trust, including service provider fees, listing fees, and up to $500,000 per annum in ordinary legal fees.
• The Trust's structure avoids derivatives, limiting additional counterparty and credit risks.

Negatives

• Chainlink and other digital assets have experienced extreme price volatility, with Chainlink showing a historical annualized volatility of 104.63% and a maximum annual price decrease of 85.87% over five years.
• The Trust is passively managed, meaning it will not take actions to mitigate losses from price declines or capitalize on price increases.
• Shares may trade at a discount or premium to the Net Asset Value (NAV) due to non-concurrent trading hours between the Exchange and 24-hour digital asset markets.
• The potential for future staking introduces new risks, including loss of rewards, slashing penalties, and operational uncertainties, with limited recourse against Staking Agents.
• The Trust's reliance on a single asset class (Chainlink) means any decline in Chainlink's price will directly reduce the value of the Shares without diversification benefits.
• The limited liability of the Chainlink Custodian and Prime Execution Agent, coupled with shared insurance coverage, may not fully protect the Trust from all potential losses.

Risks

• A determination that Chainlink is a security could adversely affect its value, potentially leading to the Trust's termination or significant regulatory compliance costs.
• Extreme volatility in Chainlink's trading price, influenced by market sentiment, adoption rates, regulatory actions, and competition, could lead to substantial loss of Share value.
• Vulnerabilities in the Chainlink Network or Ethereum Blockchain, such as flaws in source code, 51% attacks, or quantum computing advances, could compromise security and functionality.
• Regulatory uncertainty in the U.S. and foreign jurisdictions regarding digital assets, including stablecoins, could restrict Chainlink's use or impact its market value.
• The Pricing Benchmark, used for NAV calculation, has a limited history and its methodology could change, potentially failing to accurately track Chainlink's global market price.
• Loss or destruction of private keys by the Chainlink Custodian could result in irreversible loss of the Trust's Chainlink holdings.
• Competition from other digital assets, central bank digital currencies (CBDCs), or other investment vehicles could negatively impact Chainlink's demand and price.
• The Trust's reliance on a leanly staffed Sponsor and key personnel introduces operational risk if critical staff depart.
• Potential conflicts of interest may arise between the Sponsor, its affiliates, and the Trust, particularly concerning resource allocation and proprietary trading.
• The Trust's status as a grantor trust for tax purposes could be challenged by the IRS, potentially leading to different tax classifications and adverse consequences for Shareholders.
• Shareholders may incur tax liabilities from staking rewards or sales of Chainlink to cover expenses, even without corresponding cash distributions.
• The market infrastructure of the Chainlink spot market, including unregulated trading platforms, may be susceptible to fraud, manipulation, and security breaches, affecting liquidity and price integrity.
• The potential for a temporary or permanent fork of the Ethereum Blockchain could adversely affect Chainlink's value and the Trust's operations, with no guarantee the Sponsor will choose the most valuable fork.
• Shareholders forgo potential economic benefits from forks or airdrops, as the Trust explicitly disclaims Incidental Rights and IR Assets.
• The use of Trade Credits in the Agent Execution Model exposes the Trust to risks of delays, significant price deviations, and potential liquidation of assets if credits are not repaid.

Future Outlook

The Trust intends to conduct staking of its Chainlink holdings as a secondary investment objective at a future date. The Sponsor expects the Trust to have an immaterial amount of cash flow from operations and an insignificant cash balance at the end of each reporting period. The Sponsor also anticipates that the need to fair value Chainlink will not be a common occurrence.

Management Comments

• The Sponsor believes that the design of the Trust will enable certain investors to more effectively and efficiently implement strategic and tactical asset allocation strategies that use Chainlink by investing in the Shares rather than purchasing, holding and trading Chainlink directly.
• The Sponsor believes that the Chainlink Custodian's policies, procedures, and controls for safekeeping, exclusively possessing, and controlling the Trust's Chainlink holdings are consistent with industry best practices to protect against theft, loss, and unauthorized and accidental use of the private keys.
• The Sponsor believes that the security procedures in place for the Trust, including, but not limited to, offline storage, or cold storage, multiple encrypted private key shards, and other measures, are reasonably designed to safeguard the Trust's Chainlink.

Industry Context

StockSavvy.ai notes that the launch of the Bitwise Chainlink ETF (CLNK) signifies the continued institutionalization of the digital asset market, following the trend of Bitcoin and Ethereum ETFs. This product aims to bridge the gap between traditional finance and the burgeoning decentralized finance (DeFi) ecosystem by offering regulated exposure to Chainlink, a critical oracle network. The emphasis on robust custody solutions (Coinbase Custody) and a clear pricing benchmark (CME CF Chainlink-Dollar Reference Rate) reflects the industry's response to past volatility and regulatory scrutiny. The intention to incorporate staking as a secondary objective aligns with broader trends in proof-of-stake digital assets, seeking to generate additional yield for investors, a feature that could differentiate it from earlier spot ETFs. However, the filing also highlights the persistent regulatory uncertainties, particularly regarding digital asset classification and stablecoin oversight, which remain key industry-wide challenges.

Comparison to Industry Standards

• The 0.34% Sponsor Fee, with an initial three-month waiver on the first $500 million, is competitive within the nascent digital asset ETF space, comparable to or slightly lower than some Bitcoin and Ethereum spot ETFs launched recently.
• Chainlink's market capitalization of $9 billion and average daily trading volume of $774.37 million (as of January 26, 2026) are significantly smaller than those of Bitcoin ($1,904.29 billion market cap, $43.35 billion ADV) and Ethereum ($385.56 billion market cap, $23.92 billion ADV), indicating lower liquidity and potentially higher volatility compared to more established digital assets.
• The use of Coinbase Custody, a New York State-chartered trust company with a long track record in digital asset custody, aligns with industry best practices for institutional-grade security, similar to custodians used by other major digital asset funds.
• The reliance on the CME CF Chainlink-Dollar Reference Rate, designed based on IOSCO Principles for Financial Benchmarks, provides a standardized valuation method, mirroring the approach taken by leading Bitcoin and Ethereum benchmarks.
• The Trust's passive management strategy is standard for spot commodity ETFs, but contrasts with actively managed digital asset funds that might seek to mitigate volatility or enhance returns through active trading.

Management Changes

Corporate Governance

Related Party Transactions

• Bitwise Asset Management, Inc. (BAM), the parent company of the Sponsor, purchased 8 Seed Shares of the Trust for $200.00 on October 22, 2025.
• Bitwise Investment Manager, LLC (BIM), an affiliate of the Sponsor, purchased 100,000 Shares (Seed Baskets) for $2,500,000 on January 13, 2026, and subsequently sold them on January 14, 2026.
• The Sponsor and its affiliates, officers, directors, and employees may trade in Chainlink or related derivatives for their own accounts or client accounts, potentially creating conflicts of interest, though policies are in place to mitigate this.
• The Prime Execution Agent (Coinbase, Inc.) and Chainlink Custodian (Coinbase Custody Trust Company, LLC) are affiliates of Coinbase Global, Inc., which is a related party to the Trust's service providers.

Stakeholder Impact

• Shareholders: Gain regulated exposure to Chainlink, benefit from initial fee waiver, but are exposed to high volatility, custody risks, and potential for trading at premiums/discounts to NAV. They have limited voting rights and may incur tax liabilities without distributions.
• Sponsor (Bitwise Investment Advisers, LLC): Receives a Sponsor Fee (after waiver period) for managing the Trust and assumes most operating expenses, benefiting from the Trust's growth. Faces competition and operational risks.
• Authorized Participants: Facilitate creation and redemption of shares, earning transaction fees, but bear risks associated with arbitrage and market liquidity.
• Chainlink Network: The Trust's operations, particularly future staking, could contribute to the network's security and liquidity, but also expose it to network-specific risks like slashing.
• Regulators: The Trust operates within evolving regulatory frameworks, with ongoing scrutiny from the SEC and other agencies regarding digital asset classification and market practices.

Next Steps

• The Trust intends to conduct staking of its Chainlink holdings as a secondary investment objective at a future date, requiring an amendment to its registration statement.
• The Sponsor will continue to monitor and evaluate the Trust's risk management processes and policies, including cybersecurity measures.
• The Sponsor will review its cybersecurity policies and practices annually and conduct ongoing due diligence on third-party service providers.
• The Sponsor will continue to oversee the Trust's service providers and manage its day-to-day administration.

Key Dates

Recommendation

The Bitwise Chainlink ETF offers a regulated avenue for exposure to Chainlink, a significant digital asset in the oracle network space. The initial fee waiver is attractive, and the use of institutional-grade custodians provides a level of security. However, the inherent extreme volatility of Chainlink, coupled with significant regulatory uncertainties surrounding digital assets and the nascent nature of the ETF itself, warrants a cautious approach. While the long-term potential of Chainlink's utility in decentralized applications is notable, the risks associated with market manipulation, network vulnerabilities, and potential adverse tax implications are substantial. A 'hold' recommendation is appropriate for investors who already have exposure or are considering a speculative allocation, acknowledging both the growth potential and the considerable downside risks in this evolving market.

Keywords

Chainlink ETF, CLNK, Bitwise, Digital Assets, Cryptocurrency, SEC Filing, 10-K, Blockchain, Ethereum, Staking, Coinbase Custody, NYSE Arca, Investment Trust, Financial Reporting, Risk Factors, Regulatory Compliance, Passive Management, NAV, Sponsor Fee