Bitwise Asset Management, a prominent player in the crypto investment space, has filed for a significant update to three of its crypto futures ETFs amid the XRP ETF frenzy. It plans to shift their strategies towards a dynamic rotation between crypto and U.S. Treasuries based on market conditions.
Bitwise Files for Crypto ETF Conversion
The conversion, which is expected to take effect around December 3, 2024, is part of the asset manager’s strategy to optimize returns while managing downside risks in volatile markets. According to the SEC filings made on Friday, October 4, the three funds undergoing the change are:
- Bitwise Bitcoin Strategy Optimum Roll ETF (BITC), which will be rebranded as the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF.
- Bitwise Ethereum Strategy ETF (AETH), which will become the Bitwise Trendwise Ethereum and Treasuries Rotation Strategy ETF.
- Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP), which will be renamed the Bitwise Trendwise BTC/ETH and Treasuries Rotation Strategy ETF.
These ETFs will adopt the firm’s proprietary “Trendwise” rotation strategy. It has been designed to minimize downside volatility by rotating out of cryptocurrencies and into U.S. Treasuries when the market shows signs of weakness. Matt Hougan, Chief Investment Officer at Bitwise, noted that “momentum is a well-established factor in virtually every asset class, and it is powerful in crypto as well.”
The new Trendwise strategy leverages this momentum by following a trend-based rotation model that responds to market direction, Hougan explained. Moreover, the Trendwise strategy operates on a signal based on the 10-day and 20-day exponential moving averages (EMA) of cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
When the 10-day EMA exceeds the 20-day EMA, the funds will invest in the respective cryptocurrencies, indicating a bullish trend. Conversely, if the 10-day EMA falls below the 20-day EMA, the funds will shift into Treasuries, signaling a bearish market. According to Hougan, the goal of this strategy is “to help minimize downside volatility and potentially improve risk-adjusted returns.”
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Importantly, the asset manager has assured investors that there will be no changes to the funds’ expense ratios or tax treatments. Existing investors do not need to take any action to accommodate the shift.
XRP ETF Filing Creates Hype
This filing marks another significant milestone in what has been an eventful year for Bitwise. In January, the company launched its first spot Bitcoin ETF, followed by its first Ethereum ETF in July. Also, in August, the investment firm expanded its footprint in Europe with the acquisition of ETC Group, a European crypto fund provider.
Most recently, in September, Bitwise filed for a spot XRP ETF, sparking excitement among investors. Currently, Ripple’s supporters have gone gaga over the filing as they expect it to boost XRP price in the long run.
Commenting on the company’s expanding product offerings, Bitwise President Teddy Fusaro said:
“We believe there are many different ways in which investors will want to gain access to this new and emerging asset class. We’re excited to introduce new groundbreaking strategies for these three ETFs to give investors more options for accessing the market.”
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Also Read: Spot Bitcoin ETFs Register Net Outflow of $54.13M on October 3, 2024, ET
