Bitwise Asset Management announced on Friday plans to convert its three crypto futures ETFs from long-only strategies to a dynamic rotation strategy that balances exposure between cryptocurrencies and U.S. Treasuries based on market trends. The conversion is expected to occur on or around 3 December 2024.
According to the press release issued by Bitwise on October 4, these ETFs will adopt Bitwise’s proprietary “Trendwise” rotation strategy, which aims to reduce downside volatility and achieve long-term growth. The strategy works by rotating out of crypto assets like Bitcoin and Ethereum into U.S. Treasuries when crypto markets show signs of decline. The goal is to minimize losses during downturns while capitalizing on market momentum during upswings.
The ETFs undergoing the transformation include
- BITC: The Bitwise Bitcoin Strategy Optimum Roll ETF will become the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF;
- AETH: The Bitwise Ethereum Strategy ETF will convert into the Bitwise Trendwise Ethereum and Treasuries Rotation Strategy ETF.
- BTOP: The Bitwise Bitcoin and Ether Equal Weight Strategy ETF will be renamed the Bitwise Trendwise BTC/ETH and Treasuries Rotation Strategy ETF.
The funds’ strategy uses a signal based on the 10- and 20-day exponential moving averages (EMA) of crypto assets. When the 10-day EMA is higher than the 20-day EMA, the fund gains exposure to cryptocurrencies. When the reverse is true, the fund moves into Treasuries to hedge against potential declines.
Matt Hougan, Bitwise’s Chief Investment Officer, highlighted that momentum is a critical factor in most asset classes, and the Trendwise strategies are designed to capture that momentum while reducing volatility. Investors can expect no changes in the funds’ expense ratios or tax treatments, and no action is required on their part.
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