tl;dr
Asset manager Bitwise is consolidating three futures-based crypto ETFs into a single offering, the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF, in December. The new fund will combine the Bitwise Bitcoin Strategy Optimum Roll ETF, the Bitwise Ethereum Strategy ETF, and the Bitwise ...
Asset manager Bitwise is consolidating three futures-based crypto ETFs into a single offering, the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF, in December. The new fund will combine the Bitwise Bitcoin Strategy Optimum Roll ETF, the Bitwise Ethereum Strategy ETF, and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF.
The fund's strategy involves shifting exposure between Bitcoin and Ethereum futures contracts and U.S. Treasuries based on a proprietary signal analyzing cryptocurrency price moving averages. Bitwise's new fund aims to minimize downside volatility and potentially improve risk-adjusted returns. It will charge investors a 0.85% fee ratio and does not directly invest in digital assets.
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.
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.
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.”