Bitwise Asset Management has converted three crypto futures ETFs from long-only strategies to dynamic rotation strategies that alternate between cryptocurrency and US Treasuries based on market price trends.
The new strategies aim to shield investors from downside volatility in Bitcoin and Ethereum.
According to Bitwise, the shift is aimed at enhancing risk-adjusted returns for investors while mitigating downside exposure.
The newly rebranded funds are the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF (BITC US), which invests in Bitcoin futures; the Bitwise Trendwise Ethereum and Treasuries Rotation Strategy ETF (AETH US), which invests in Ethereum futures; and the Bitwise Trendwise BTC/ETH and Treasuries Rotation Strategy ETF (BTOP US), which targets a 50/50 allocation between Bitcoin and Ethereum futures.
Each ETF now employs a momentum-based strategy using a proprietary signal derived from the 10-day and 20-day exponential moving averages (EMA) of their underlying cryptocurrency.
When the 10-day EMA rises above the 20-day EMA, signaling positive momentum, the funds will allocate 100% of their capital to cryptocurrency futures.
Conversely, when the 10-day EMA falls below the 20-day EMA, the funds will rotate fully into US Treasuries, providing a more defensive posture.
Matt Hougan, Chief Investment Officer at Bitwise, emphasized the investor-driven nature of the development. “Investors tell us they want smart exposure to crypto’s potential. These new Trendwise strategies capitalize on something that is widely understood — that momentum exists in the crypto markets — in an effort to boost risk-adjusted returns while reducing downside risk. We are very excited about these new strategies.”
Teddy Fusaro, President of Bitwise, highlighted the company’s commitment to innovation in the crypto ETF space. “At Bitwise, we believe there are many different ways in which investors want to gain exposure to the emerging crypto asset class. We’re excited to introduce these groundbreaking strategies for these ETFs to give investors more options for accessing the market.”
The funds’ conversion comes with no change to expense ratios, which remain at 0.85%, or tax treatment.
These conversions mark another milestone in what has been a significant year for Bitwise. In addition to introducing its first spot Bitcoin and Ethereum ETFs, the firm also entered Europe by acquiring local crypto fund provider ETC Group.