Asset manager Bitwise has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to merge three bitcoin and ethereum futures exchange-traded funds (ETFs) into a single fund. This new fund will utilize a momentum-based strategy, targeting both bitcoin and ether futures.
Bitwise Plans ETF Merger, Aims to Launch Momentum-Based Bitcoin and Ether Fund
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Bitwise to Combine Bitcoin and Ethereum ETFs
According to the SEC filing, Bitwise plans to combine its Bitcoin Optimum Roll Strategy ETF, Ethereum Strategy ETF, and Bitcoin and Ether Equal Weight Strategy ETF into a single entity, called the Bitwise Trendwise BTC/ ETH and Treasuries Rotation Strategy ETF. This momentum-based ETF will shift its exposure between bitcoin and ethereum futures, aiming to optimize returns during favorable market conditions by following trends in price movements. The fund will be actively managed, rather than passively tracking an index, to adapt to market volatility.
“At Bitwise, we believe there are many different ways in which investors will want to gain access to this new and emerging asset class,” Teddy Fusaro, the president of Bitwise said on Friday. “We’re excited to introduce new groundbreaking strategies for these three ETFs to give investors more options for accessing the market,” Fusaro added.
The momentum-based strategy described in the SEC filing involves moving between bitcoin and ethereum futures depending on signals from short-term price trends. Bitwise plans to allocate assets based on a proprietary trend-following system that analyzes the 10-day and 20-day exponential moving averages (EMAs) of BTC and ETH prices. By doing so, the fund intends to minimize risks and maximize returns during periods of significant price movement in either asset class.
As part of the transition, the new fund will also hold U.S. Treasury securities alongside the cryptocurrency futures, with the goal of enhancing liquidity and reducing risk during periods of market instability. Bitwise highlights in the filing that this structure could provide a balance between the volatility of cryptocurrencies and the stability of government-backed securities, offering a diversified approach to investors looking to capitalize on the dynamic cryptocurrency market while managing risks through traditional assets.
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