Janice R. Andrews
Bitwise Asset Management is revamping its crypto exchange-traded product (ETP) lineup in response to changing market dynamics. The company plans to merge three of its futures-based funds into a new offering called the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF (BITC). This innovative fund will dynamically allocate between crypto futures and U.S. Treasuries based on market conditions.
The strategic shift comes as spot crypto ETFs gain traction, challenging the appeal of futures-based products. Bitwise’s own spot bitcoin ETF, launched earlier this year, has already amassed $2 billion in assets. To adapt, the firm is consolidating its Bitcoin Strategy Optm Roll ETF (BITC), Ethereum Strategy ETF (AETH), and Bitcoin and Ether Equal Weight Strategy ETF (BTOP) into the new BITC fund.
The BITC fund’s unique approach allows it to toggle between full exposure to crypto futures and complete allocation to U.S. Treasuries, depending on market trends. This strategy aims to balance the growth potential of cryptocurrencies with the stability of government securities, potentially offering a smoother investment experience in the volatile crypto market.
Bloomberg Intelligence ETF analyst James Seyffart suggests that Bitwise’s move reflects investor sentiment. He notes that while investors are interested in bitcoin exposure, they’re concerned about its volatility. The rotation strategy could help mitigate downside risk while maintaining upside potential.
Set to launch on December 3, the new fund will charge an expense ratio of 0.85%. This development highlights the crypto investment industry’s evolution, as providers create more sophisticated products that blend growth opportunities with risk management features.
Bitwise’s initiative underscores the ongoing maturation of the crypto ETF market, as it adapts to meet investor demand for products that can navigate the sector’s inherent volatility while offering exposure to its potential returns.
