TL;DR
- Bitwise Asset Management will transform three of its cryptocurrency futures ETFs starting on December 3. 2024, implementing a dynamic rotation strategy.
- The new “Trendwise” strategy will allow for alternating between cryptocurrencies and Treasury bonds. Based on the 10-day and 20-day exponential moving averages.
- Current investors will not need to make any changes. The strategy will not affect the expense ratios or tax treatment of the ETFs.
Bitwise Asset Management has announced its intention to transform three of its cryptocurrency futures ETFs starting on December 3, 2024.
This change involves a transition from long-only strategies to a dynamic rotation approach, which will allow the ETFs to alternate between investments in cryptocurrencies and U.S. Treasury bonds. The new strategy, known as “Trendwise,” aims to adapt to market conditions by limiting downside volatility while pursuing sustained long-term price growth.
How Will Bitwise Strategy Work?
The implementation of this strategy is based on the analysis of the 10-day and 20-day exponential moving averages of key assets in the crypto market, such as Bitcoin and Ethereum. In practical terms, if the 10-day moving average crosses above the 20-day moving average, the funds will be allocated to cryptocurrencies. Conversely, when the 20-day moving average surpasses the 10-day moving average, the funds will shift to investments in Treasury bonds. This methodology aims to optimize the performance of the ETFs based on market fluctuations.
An important aspect of this change is that it will not affect the expense ratios or tax treatment of the ETFs. And current investors will not have to take any action to adapt to the new strategy. This provides continuity in the management of their investments. While implementing a more agile and responsive approach to market conditions.
Announcements, Acquisitions, and Launches
The announcement also comes in an active year for Bitwise, which has expanded its portfolio through the launch of spot offerings in Bitcoin and Ethereum. As well as by acquiring the European crypto fund operator ETC Group. Recently, the company has filed paperwork with the U.S. Securities and Exchange Commission (SEC) to launch a spot XRP ETF.
However, the proposal is framed amid legal attention regarding the classification of XRP as a security. The legal dispute between the SEC and Ripple Labs continues. Where the status of the XRP token in the market is being debated
