According to Blockworks, Bitwise has made significant changes to its crypto exchange-traded funds (ETFs) by converting three of its futures-based ETFs into 'Trendwise' products. These funds now rotate between crypto and US Treasurys based on market price trends. This adjustment aims to provide a different type of exposure for investors seeking to balance risk and returns in the volatile crypto market.
The new strategy involves investing in crypto futures when the 10-day exponential moving average (EMA) of Bitcoin (BTC) or Ethereum (ETH) prices is above the 20-day EMA, indicating upward momentum. Conversely, the funds will shift to US Treasurys when the opposite trend is observed. This approach is designed to enhance risk-adjusted returns while minimizing downside risk.
Bitwise initially launched its BTC futures ETF in March 2023, followed by an ETH futures offering and a combined BTC and ETH futures contract in October 2023. The recent changes to these funds reflect ongoing innovation in the crypto ETF space. Other issuers have also been exploring new strategies, such as buffer or covered call strategies, and introducing new crypto assets like Solana and XRP into ETF products.
Despite the dominance of US spot bitcoin ETFs, which have attracted $31 billion in net inflows since their launch in January, the crypto market is expected to continue evolving. As more investors enter the space, potentially under the guidance of more crypto-friendly regulators, there is anticipated demand for more nuanced products that extend beyond the largest crypto assets.
