Bitwise Launches Bitcoin and Treasuries Rotation ETF Strategy

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Bitwise Asset Management revealed today that it has submitted a proposal to the SEC for modifying the investment tactics of its three existing Bitcoin and Ethereum futures ETFs. Each fund will transition into trend-following strategies that focus on rotating exposure between crypto and US Treasuries depending on the prevailing market conditions.

As outlined, three of Bitwise’s crypto futures ETFs, including 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), will be converted into the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF, the Bitwise Trendwise Ethereum and Treasuries Rotation Strategy ETF, and the Bitwise Trendwise BTC/ETH and Treasuries Rotation Strategy ETF, respectively.

The proposed ETFs will modify their investment allocations according to market conditions, indicating that these funds will engage in cryptocurrency investments when they are on an upward trend and shift to US Treasuries during market declines.

As per Bitwise, the strategy utilizes a proprietary signal that assesses the 10- and 20-day exponential moving average (EMA) of cryptocurrency price trends. When the 10-day EMA surpasses the 20-day EMA, signifying upward movement, the ETFs will direct investments into crypto assets. Conversely, when the 20-day EMA exceeds the 10-day EMA, suggesting a downward slide, the ETFs will shift to Treasuries.

With the implementation of the new Trendwise strategies, Bitwise aims to augment risk-adjusted returns by leveraging market momentum while shielding investors amid bearish conditions.

“The new Trendwise strategies harness momentum through a trend-following approach that transitions between crypto and Treasuries exposure based on market movements. The objective is to minimize downside volatility and potentially enhance risk-adjusted returns,” Bitwise explained.

Current investors will not be required to take any action, and there will be no adjustments to expense ratios or tax implications, Bitwise confirmed. The ETF conversions are slated for December 3, 2024.

Bitwise has celebrated significant achievements this year, including the successful introduction of its spot Bitcoin and Ethereum ETFs, attracting over $10 billion in net inflows according to data monitored by Farside Investors.

Bitwise has recently submitted an application to introduce an XRP ETF as part of its strategy to offer investors a range of diversified investment avenues, a noteworthy initiative amid the ongoing legal battle between Ripple Labs and the SEC.