Bitwise is merging three futures-based funds into the new Trendwise Bitcoin and Treasuries Rotation Strategy ETF, designed to reduce volatility by shifting between Bitcoin futures and U.S. Treasuries.
Bitwise Asset Management has announced a significant shift in its investment strategy, unveiling plans to merge three of its existing futures-based Bitcoin exchange-traded funds (ETFs) into a single product that will alternate between Bitcoin futures and U.S. Treasuries. This move comes in response to the growing popularity of spot Bitcoin ETFs, which have made futures-based products less attractive for investors.
Bitwise has filed for a new #Bitcoin and Treasuries rotation ETF.
— TFTC (@TFTC21) October 4, 2024
The ETF will trade under the ticker $BITC. pic.twitter.com/mSvDvjQfzT
The newly formed fund, called the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF (BITC), will rotate between 100% exposure to cryptocurrency futures contracts and 100% exposure to U.S. Treasuries, depending on market trends. This dynamic strategy is designed to reduce volatility, particularly during market downturns, and enhance long-term returns. The transition is scheduled to take place on December 3, 2024.
In a statement, Bitwise noted that the rise of spot Bitcoin ETFs—such as the one it launched earlier this year—has diminished the appeal of futures-based products. Bitwise’s spot Bitcoin ETF alone has attracted $2 billion in assets, which contributed to the decision to rethink its futures-based offerings.
"We’re adapting to what our clients and potential clients are asking for," said James Seyffart, an ETF analyst at Bloomberg Intelligence. "There’s a demand for Bitcoin investment options that mitigate downside risk, and Bitwise’s new strategy is aimed at addressing that."
The strategy employs a proprietary signal based on the 10- and 20-day exponential moving averages (EMA) of crypto assets. When upward momentum is indicated—when the 10-day EMA is higher than the 20-day EMA—the ETF will focus on Bitcoin. Conversely, when the 20-day EMA overtakes the 10-day EMA, the fund will shift its investments into U.S. Treasuries.
Despite the changes, Bitwise assured that current investors in the existing ETFs will not need to take any action, and there will be no changes to the funds’ expense ratios or tax treatment.
This strategic shift represents a broader trend of asset managers adjusting their offerings in light of market conditions. As the landscape continues to evolve, Bitwise is positioning itself as a leader in creating flexible, risk-managed products that appeal to both retail and institutional investors.
