Bitwise has decided to combine three of its futures-based ETFs into a single fund owing to the decreasing popularity of futures-based exchange-traded products.
The trading community at present seems to be lured towards spot crypto-based ETFs which have time and again proved great success with rising inflows.
Bitwise has combined the Bitwise Bitcoin Strategy Optm Roll ETF (BITC), Bitwise Ethereum Strategy ETF (AETH), and Bitwise Bitcoin and Eth Eq Wgh Str ETF (BTOP) to create the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF (BITC).
How Will The New Fund Function?
According to a statement from Bitwise, investors seeking long-term capital appreciation now find futures-based cryptocurrency funds less appealing after the spot Bitcoin and Ethereum ETFs were introduced earlier this year.
The new fund allows the asset management to better control market volatility by allowing it to alternate, based on market movements, between 100% exposure to U.S. Treasuries and 100% exposure to crypto futures contracts.
The strategies are aimed at shifting Bitwise’s exposure between crypto and US Treasuries in response to market movements. The ETFs will be managed using a rotation technique, which rotates out of cryptocurrency and into Treasuries during bear markets to reduce downside volatility and achieve long-term price growth.
“Momentum is a well-established factor in virtually every asset class, and it is powerful in crypto as well,” said Bitwise CIO Matt Hougan. “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.”
Spot Crypto ETF Market Still Bags Investor Preference
Time and again the market has tested the hype of Crypto spot ETFs. Though a lackluster start for the Ethereum ETFs and a rising outflows for that of Bitcoin have put the craze to test.
Despite this, as the risk appetite and the ease of investment rise, so does the demand for crypto-based ETFs. Additionally, Bitcoin ETFs have seen a skyrocketing demand from both retail and institutional investors.
Bloomberg in one of its previous reports mentioned that the interest in US cryptocurrency exchange-traded funds has moved to Ether and Solana tokens at present, giving Solana its biggest increase ever. But Bitcoin ETFs still remain one of the most preferred choices at present.