Bitwise has donated $233,000 to Bitcoin open-source developers as part of its ongoing commitment to reinvest a portion of profits from its Bitcoin ETF back into the broader ecosystem.
The contribution comes from the revenue generated from the $BITB ETF, as the asset management company had pledged to contribute 10 percent of the gross profits earned from its own fund for the development of open-source code for Bitcoin.
The move is aimed at supporting the engineers working on the infrastructure of the Bitcoin network.
The role that open-source development plays in the Bitcoin network cannot be overstated. Unlike traditional financial systems, where a single entity is responsible for its maintenance, in the case of Bitcoin, a number of developers across the world are working for its development and security.
Who will receive the funds?
Bitwise said that the donation will go to a number of different groups and projects that work to improve Bitcoin’s underlying protocol.
These groups are in charge of keeping Bitcoin Core up to date, making improvements to the protocol, and making sure the network stays up and running.
The firm initially revealed their commitment to sharing profits when launching their $BITB ETF product.
As demand for regulated Bitcoin investment vehicles grows, Bitwise argues that some of the financial benefits should flow back to the developers who help maintain the network.
Crypto firms increase funding for open-source blockchain development
The donation also represents a larger trend among crypto companies and funds to directly back open-source development. Several companies in the space have established grant programs, developer funds, and research initiatives to further develop the underlying technology.
For the case of Bitwise, the move has both philanthropic and business implications. The organization’s decision to back developers will lead to the long-term sustainability of the Bitcoin network, which is vital to the value of the asset.
As the number of institutions investing in the asset through products such as the exchange-traded funds continues to grow, the contributions of asset managers could become a vital source of funds for the open-source development of the world’s largest cryptocurrency network.