Bitwise Consolidates Crypto ETFs into New Rotation Strategy Fund

Bitwise Asset Management is set to consolidate three of its futures-based cryptocurrency exchange-traded funds (ETFs) into a single innovative offering. According to recent filings with the U.S. Securities and Exchange Commission (SEC). The newly proposed ETF, named the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF, is designed to adaptively shift its holdings between Bitcoin and Ethereum futures and U.S. Treasury securities.

Dynamic Allocation Based on Market Momentum

The new fund will merge 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) into one cohesive portfolio. This strategic move aims to enhance the fund’s adaptability to market conditions by utilizing a proprietary signal that analyzes moving averages of cryptocurrency prices to determine the fund’s allocation.

Momentum Investing in Crypto

According to Bitwise, the fund will adopt a momentum-based investment strategy. Increasing its exposure to cryptocurrency futures when the market shows signs of upward momentum and shifting towards U.S. Treasuries during downturns. This approach is intended to minimize downside volatility. While potentially improving the risk-adjusted returns for investors.

Broader Access to Crypto Investments

Following the SEC’s approval of Bitwise’s spot Bitcoin ETF earlier this year—a move that put Bitwise alongside major financial players like BlackRock and Fidelity—the firm has continued to expand its offerings in the crypto space. The new fund represents a continuation of Bitwise’s efforts to provide traditional investors with structured exposure to digital assets without the direct risks associated with holding cryptocurrencies.

Adjusting to Market Trends and Investor Interest

This consolidation comes at a time when the landscape for crypto-related investment products is rapidly evolving. With the introduction of spot-based crypto ETFs, many asset managers have begun to reevaluate and adjust their futures-based offerings. For instance, VanEck recently announced the liquidation of its Ethereum futures product, citing shifts in investor interest and market liquidity.

Operational Details and Fees

The Bitwise Trendwise ETF will charge a management fee of 0.85%. Importantly, the fund will not hold digital assets directly; instead, it will operate through futures contracts and U.S. Treasury securities, allowing it to fully pivot its exposure away from cryptocurrencies when warranted by market conditions.

A New Chapter for Crypto ETFs

With this innovative approach to crypto investment, Bitwise is not only simplifying its product lineup but also introducing a flexible strategy that could appeal to a broad spectrum of investors looking to navigate the volatile crypto markets. Teddy Fusaro, President of Bitwise, emphasized the pioneering nature of the new ETF, underscoring the firm’s commitment to developing diverse strategies for accessing the burgeoning asset class.