Asset manager Bitwise is streamlining three of its futures-based crypto ETFs, set to fold the products into a single offering in December, according to documents filed Friday with the U.S. Securities and Exchange Commission (SEC).
Dubbed the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF, the fund’s strategy entails periodically shifting exposure between Bitcoin and Ethereum futures contracts and assets like U.S. Treasuries. Those changes are motivated by “a proprietary signal,” the firm said , which looks at several moving averages for cryptocurrency prices.
The new fund will combine the Bitwise Bitcoin Strategy Optimum Roll ETF (BITC), the Bitwise Ethereum Strategy ETF (AETH), and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP).
The slated conversion follows Bitwise’s entry into the spot Bitcoin ETF space alongside financial titans like BlackRock and Fidelity in January, following SEC approval. Currently, the Bitwise Bitcoin ETF holds nearly 39,000 Bitcoin worth $2.3 billion, according to CoinGlass data .
The fund takes a momentum-based approach toward investing in Bitcoin and Ethereum futures. When Bitwise’s signal indicates that “prices are gaining momentum,” the fund gains crypto exposure, while seeking refuge in government debt when the opposite trend emerges.
“Momentum is a well-established factor in virtually every asset class, and it is powerful in crypto as well,” Bitwise CIO Matt Hougan said in a press release , adding that the new fund’s goal is to “help minimize downside volatility and potentially improve risk-adjusted returns.”
Following the launch of its spot Ethereum ETF in July, Bitwise has continued to position itself as a purveyor of funds giving investors access to crypto through traditional brokerage accounts. Earlier this week, Bitwise filed an industry-first application for a spot XRP ETF in the U.S.
The first futures-based crypto ETF was approved three years ago, when regulators gave ProShares’ Bitcoin Trust a green light . Since the launch of spot-based alternatives, however, several asset managers have recalibrated futures-based offerings.
VanEck said last month, for example, that it would liquidate its futures investment product for Ethereum. The firm cited investor interest and liquidity as factors for determining the move.
Bitwise’s new fund is set to charge investors a 0.85% fee ratio, and its prospectus makes clear that it does not invest directly in digital assets. Because the fund can rotate its exposure into U.S. Treasuries completely, Bitwise said “there will be periods—and perhaps extended periods—when the Fund has no exposure to Bitcoin futures contracts” at all.
While Bitwise lists its three funds’ “limited operating history” as a potential risk, Bitwise President Teddy Fusaro said in a statement that the company is breaking new ground with the product.
“At Bitwise, we believe there are many different ways in which investors will want to gain access to this new and emerging asset class,” he said. “We’re excited to introduce new groundbreaking strategies for these three ETFs to give investors more options for accessing the market.”
Edited by Andrew Hayward
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## Conclusion
In conclusion, Bitwise’s move to streamline three of its futures-based crypto ETFs into a single offering demonstrates the company’s commitment to providing innovative investment solutions in the rapidly evolving cryptocurrency market. The Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF combines exposure to Bitcoin and Ethereum futures with U.S. Treasuries, offering investors a diversified approach to navigating price movements in the volatile crypto space.
By incorporating a momentum-based strategy that dynamically adjusts exposure based on market signals, the new fund aims to minimize downside volatility and enhance risk-adjusted returns for investors. This approach leverages well-established factors like momentum across asset classes and applies them to the unique dynamics of cryptocurrencies, providing a novel investment option for those seeking exposure to digital assets.
Bitwise’s foray into the spot Bitcoin ETF space earlier this year marked a significant milestone for the company, positioning it alongside industry giants in offering direct exposure to Bitcoin through traditional brokerage accounts. With the launch of the Bitwise Trendwise ETF and its innovative rotation strategy, Bitwise continues to push the boundaries of crypto investment products, catering to a diverse range of investor preferences and risk profiles.
As the cryptocurrency landscape continues to evolve and adapt to regulatory developments, Bitwise’s strategic focus on developing cutting-edge ETF products underscores its commitment to providing accessible and innovative investment solutions for the growing number of individuals interested in digital assets. With the launch of the Bitwise Trendwise ETF and its unique approach to managing exposure to Bitcoin, Ethereum, and traditional assets, Bitwise is poised to attract a broad spectrum of investors looking to navigate the complexities of the crypto market.
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