As a seasoned analyst with over two decades of experience in the financial industry, I find Bitwise Asset Management’s proposal to be a strategic move that addresses the inherent volatility of the crypto market. By restructuring their existing crypto futures ETFs into the new $BITC product and introducing a trend-following strategy based on exponential moving averages, they aim to offer investors a more stable investment experience while still capitalizing on potential profits.
Bitwise Asset Management has presented a plan to the United States Securities and Exchange Commission (SEC) for transforming three of its existing cryptocurrency future ETFs into a fresh product, labeled as $BITC.
Based on its design, this investment fund aims to shield investors from potential losses and provide consistent returns in the long term. During turbulent times in the cryptocurrency market, the fund can transfer funds into U.S. Treasuries as a protective measure against losses for the investors.
The changes are expected to start on December 3, 2024. The three ETFs are:
- Bitcoin Strategy Optimum Roll ETF, which will be renamed as Trendwise Bitcoin and Treasuries Rotation Strategy ETF.
- Ethereum Strategy ETF will operate under a new name Trendwise Ethereum and Treasuries Rotation Strategy ETF.
- Bitcoin and Ether Equal Weight Strategy ETF will also be renamed as Trendwise BTC/ETH and Treasuries Rotation Strategy ETF.
As per Matt Hougan, the Chief Investment Officer at Bitwise, this innovative approach employs Exponential Moving Averages (EMA) to guide safer investment decisions. When the 10-day EMA exceeds the 20-day EMA, the fund will primarily invest in digital assets such as Bitcoin and Ethereum. Conversely, if the 20-day EMA surpasses the 10-day EMA, the fund will rebalance its investments towards U.S. Treasury bonds.
As an analyst, I’ve been exploring the latest approach in our investment strategies, which we’re calling Trendwise. This strategy leverages momentum by dynamically adjusting between cryptocurrency and Treasury investments depending on market trends. The objective is to mitigate downside volatility and enhance risk-adjusted returns by capitalizing on market shifts.
Matt Hougan
Beyond this, it’s worth noting that Bitwise has submitted an application to the Securities and Exchange Commission (SEC) for a new Exchange-Traded Product (ETP) involving XRP. Nonetheless, the approval procedure might be prolonged given the ongoing legal dispute between the SEC and Ripple, which could potentially delay the product’s launch.
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2024-10-04 20:21