Bitwise Files with SEC to Launch Trend-Following Bitcoin and Treasuries ETFs in December

• Bitwise plans to rotate between crypto and Treasuries in its revamped ETFs to minimize risk and improve returns.
• The new Bitwise ETF strategy uses a trend-following model, adjusting exposure based on 10- and 20-day EMAs of crypto prices.
• Investors won’t need to act as Bitwise’s ETF conversions take effect in December 2024 with no changes to expense ratios or tax treatments.

Bitwise Asset Management has submitted a filing to the U.S. Securities and Exchange Commission (SEC) to amend the investment strategies of its existing cryptocurrency ETFs. 

The proposed strategy change will see the ETFs transition to a trend-following model that alternates between exposure to cryptocurrency and U.S. Treasuries, depending on market conditions. Bitwise intends to use this rotation strategy to balance risk and potentially improve returns in varying market environments.

New Strategy for Enhanced Risk Management

Bitwise’s revised strategy will apply to three of its cryptocurrency ETFs, including the Bitwise Bitcoin Strategy Optimum Roll ETF (BITC), Bitwise Ethereum Strategy ETF (AETH), and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP). 

The ETFs will be renamed to reflect this new approach, becoming the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF, Bitwise Trendwise Ethereum and Treasuries Rotation Strategy ETF, and Bitwise Trendwise BTC/ETH and Treasuries Rotation Strategy ETF, respectively.

These funds will dynamically adjust their holdings between cryptocurrencies and U.S. Treasuries based on market trends. The strategy hinges on a proprietary signal that tracks the 10- and 20-day exponential moving averages (EMAs) of crypto prices. 

When the 10-day EMA surpasses the 20-day EMA, the funds will increase their cryptocurrency holdings. Conversely, when the 20-day EMA is higher, the ETFs will shift towards Treasuries.

Market Timing Based on Crypto Trends

The new strategy seeks to capitalize on positive market momentum while reducing downside risk during bearish periods. By rotating into Treasuries during downturns, the ETFs aim to limit potential losses, allowing investors to navigate volatile markets with greater confidence. 

According to Bitwise, this approach is designed to provide investors with enhanced risk-adjusted returns, leveraging market direction to achieve better outcomes in both bull and bear markets.

Launch Set for December 2024

Investors in these ETFs are not required to take any action ahead of the changes, which are expected to take effect by December 3, 2024. Bitwise has confirmed that the expense ratios and tax treatments of the funds will remain unchanged following the conversion.