As a seasoned researcher with years of experience navigating the complex world of asset management and cryptocurrencies, I find Bitwise’s latest move intriguing. The decision to rotate between Bitcoin futures and U.S. Treasury exposure based on market trends is a strategic one that could potentially strike a fine balance between risk and return for investors.
In a flurry of administrative work, the department at Bitwise Asset Management has been occupied. Just three days after submitting an application for an XRP Exchange-Traded Fund (ETF), they have filed another one. This time, their focus has shifted to the dominant digital cryptocurrency, Bitcoin.
Bitwise’s new rotation strategy to balance risk and return
As per their statement, the asset management firm has chosen a strategic move to transform the investing approach of its three cryptocurrency futures ETFs. This change means that the ETF will now switch between investments in cryptocurrencies and U.S. Treasury bonds based on current market conditions.
This adjustment means that if the market trend suggests higher volatility in the cryptocurrency sector, the ETF may move some or all of its funds into U.S. Treasury bonds. Conversely, when market circumstances lean more towards Bitcoin than Treasuries, Bitwise will boost its investment in crypto futures.
Today, Bitwise has applied for a change in strategy for its trio of cryptocurrency futures ETFs. If approved, these funds would no longer be strictly long-only investments but instead could shift between crypto futures and U.S. Treasury bond exposure based on market fluctuations.
— Bitwise (@BitwiseInvest) October 4, 2024
This method acts as a safeguard for their investment, providing insurance against potential risks. Typically, U.S. Treasury bonds are considered secure and low-risk assets, so by making this move, Bitwise gains more freedom to minimize potential losses. Especially during times when Bitcoin’s market becomes volatile or bearish.
Fundamentally, Bitwise seeks a harmony between its high-risk cryptocurrency futures and secure U.S. Treasury bonds.
Product conversion and name changes set for December
As a researcher, I’m excited to share that my calendar is marked for an upcoming conversion on December 3, 2024. The symbol for this new filing will be BITC. Yet, it’s important to note that our asset manager has hinted at some changes in the names and strategies associated with this venture.
The Bitwise Strategy Optimum Roll ETF is going to change its strategy to the Bitwise Trendwise Bitcoin and U.S. Treasuries Rotation Strategy ETF. Correspondingly, the Bitwise Strategy Optimum Roll ETF’s Ethereum product will now be referred to as the Bitwise Trendwise Ethereum and U.S. Treasuries Rotation Strategy ETF.
The last product will be Bitwise Trendwise BTC/ETH and Treasuries Rotation Strategy ETF.
This method could significantly protect investors’ holdings while ensuring a careful blend of risk and returns, particularly beneficial for institutional investors.
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2024-10-04 19:11