According to an Oct. 4 statement, Bitwise plans to transition three of its Bitcoin and Ethereum futures ETFs from their current long-only strategies to strategies that alternate between cryptocurrencies and U.S. Treasuries.
The company’s crypto futures ETFs include Bitwise Bitcoin Strategy Optimum Roll ETF (BITC), Bitwise Ethereum Strategy ETF (AETH), and Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP). The coin and brand name will be changed. These are the Government Bond Rotation Strategy ETF (BITC), Bitwise Trendwise Ethereum and Government Bond Rotation Strategy ETF (AETH), and Bitwise Trendwise BTC/ETH and Government Bond Rotation Strategy ETF (BTOP).
Fund managers expect the adjustments to be made by December 3.
Notably, this move came in the same week that the asset manager filed for a spot XRP ETF with the U.S. Securities and Exchange Commission (SEC).
ETFs per trend per bit
The ETFs will adjust their exposure to cryptocurrencies or U.S. Treasuries depending on market conditions, according to a statement. When the market is strong, it focuses on investing in crypto assets, but when the market is down, it shifts to investing in U.S. Treasuries.
Bitwise explained that the Trendwise strategy improves risk-adjusted returns by capitalizing on market momentum while providing protection during bearish phases. The strategy relies on a proprietary signal that monitors the 10-day and 20-day exponential moving averages (EMAs) of cryptocurrency prices.
Therefore, if the 10-day EMA exceeds the 20-day EMA, indicating upward momentum, the Fund will invest in the cryptocurrency. If the situation were reversed, the funds would be directed to U.S. Treasuries.
Bitwise CIO Matt Hougan explained that this strategy reflects broader trends in asset management. He said:
“The new Trendwise strategy capitalizes on that momentum through a trend-following strategy that rotates exposure to cryptocurrencies and U.S. Treasuries based on market direction.The goal is to minimize downside volatility and provide risk-adjusted It has the potential to improve returns.”
Meanwhile, Bitcoin market analyst Joe Consorti praised the development, saying:
“This is big news for Bitcoin as a macro asset. U.S. Treasuries are a preferred asset for all financial institutions in the world. Adding Bitcoin to our rotating investment vehicle will increase UST’s returns and support UST This would be an attractive diversification tool for a heavily burdened balance sheet.”
These changes do not affect the Fund’s expense ratio or tax treatment, so current investors do not need to do anything.
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