Bitwise files for Bitcoin and Treasuries rotation ETF

Key Takeaways

• Bitwise's new ETF strategies will rotate between crypto and US Treasuries to manage volatility.
• The Trendwise strategies use a proprietary signal based on the 10- and 20-day EMA of crypto assets.

Bitwise Asset Management announced today it has filed with the SEC to change the investment strategies of its three existing Bitcoin and Ethereum futures ETFs. Each fund will be converted into trend-following strategies that involve rotating between crypto and US Treasuries exposure based on market conditions.

As detailed, 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 respectively become 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.

The proposed ETFs will adjust investment exposure based on market conditions, meaning that these funds will invest in crypto when they are trending upwards and rotate into US Treasuries during market downturns.

According to Bitwise, the strategy employs a proprietary signal that analyzes the 10- and 20-day exponential moving average (EMA) of crypto asset prices. When the 10-day EMA is above the 20-day EMA, indicating upward momentum, the ETFs will invest in crypto assets. Conversely, when the 20-day EMA is above the 10-day EMA, suggesting a downward trend, the ETFs will rotate into Treasuries.

With the new Trendwise strategies, Bitwise aims to enhance risk-adjusted returns by capitalizing on market momentum while protecting investors during bearish market conditions.

“The new Trendwise strategies capitalize on that momentum through a trend-following strategy that rotates between crypto and Treasuries exposure based on market direction. The goal is to help minimize downside volatility and potentially improve risk-adjusted returns,” explained Bitwise.

Existing investors will not need to take any action, and there will be no changes to expense ratios or tax treatment, Bitwise noted. The conversion of ETFs is scheduled for December 3, 2024.

Bitwise has achieved major milestones this year, including the successful launch of its spot Bitcoin and Ethereum ETFs, which have collectively attracted over $10 billion in net inflows, according to data tracked by Farside Investors.

Bitwise recently applied to offer an XRP ETF as part of its mission to provide investors with diversified investment options, a bold move given the ongoing legal fight between Ripple Labs and the SEC.