Key Takeaways
- • Bitwise Asset Management converted three crypto futures ETFs (BITC, AETH, BTOP) from long-only strategies to proprietary momentum-based "Trendwise" strategies that rotate between crypto assets and U.S. Treasuries based on price trends.
- • The Trendwise signal uses 10-day and 20-day exponential moving averages (EMA) to determine positioning: funds invest in Bitcoin or Ethereum futures when the 10-day EMA exceeds the 20-day EMA (momentum signal), and rotate into U.S. Treasuries when the reverse occurs.
- • The strategy is designed to improve risk-adjusted returns and reduce downside risk for investors seeking crypto exposure, addressing institutional demand for "smart exposure" to crypto markets.
- • Existing investors require no action; the three affected funds automatically converted to the new strategies with no changes to expense ratios or tax treatments.
- • The three renamed funds are: BITC (Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF), AETH (Bitwise Trendwise Ethereum and Treasuries Rotation Strategy ETF), and BTOP (Bitwise Trendwise BTC/ETH and Treasuries Rotation Strategy ETF).
Summary
Bitwise Asset Management announced the strategic transformation of three cryptocurrency futures ETFs by implementing proprietary momentum-based "Trendwise" strategies designed to rotate between digital assets and fixed income based on market price trends. The conversion reflects institutional investor demand for risk management mechanisms within crypto-focused products, positioning Bitwise to address the challenge of crypto volatility while maintaining upside exposure during bull market phases.
The three funds—BITC (Bitcoin), AETH (Ethereum), and BTOP (Bitcoin/Ethereum blended)—now employ a quantitative momentum signal based on exponential moving average crossovers. Specifically, the strategy monitors the relationship between the 10-day and 20-day EMA of Bitcoin and Ethereum prices. When the 10-day EMA trades above the 20-day EMA, signaling positive momentum, the funds maintain allocation to crypto futures contracts. Conversely, when momentum signals weaken and the 10-day EMA falls below the 20-day EMA, the funds rotate into U.S. Treasury holdings to reduce portfolio volatility and downside exposure during crypto market weakness.
According to Matt Hougan, Bitwise's Chief Investment Officer, the strategy addresses a fundamental investor preference for "smart exposure to crypto's potential." The Trendwise framework capitalizes on documented momentum patterns in cryptocurrency markets while simultaneously implementing a tactical de-risking mechanism through Treasury allocation. This dual-objective approach targets improved risk-adjusted returns—a critical metric for institutional capital allocating to alternative assets.
The conversion was executed seamlessly for existing shareholders, with automatic fund transitions requiring no investor action. Notably, Bitwise maintained unchanged expense ratios and tax treatment structures, avoiding friction that might otherwise trigger redemptions or tax-event complications. This operational design underscores the firm's commitment to transparency and shareholder continuity during the strategic pivot.
The three funds—BITC (Bitcoin), AETH (Ethereum), and BTOP (Bitcoin/Ethereum blended)—now employ a quantitative momentum signal based on exponential moving average crossovers. Specifically, the strategy monitors the relationship between the 10-day and 20-day EMA of Bitcoin and Ethereum prices. When the 10-day EMA trades above the 20-day EMA, signaling positive momentum, the funds maintain allocation to crypto futures contracts. Conversely, when momentum signals weaken and the 10-day EMA falls below the 20-day EMA, the funds rotate into U.S. Treasury holdings to reduce portfolio volatility and downside exposure during crypto market weakness.
According to Matt Hougan, Bitwise's Chief Investment Officer, the strategy addresses a fundamental investor preference for "smart exposure to crypto's potential." The Trendwise framework capitalizes on documented momentum patterns in cryptocurrency markets while simultaneously implementing a tactical de-risking mechanism through Treasury allocation. This dual-objective approach targets improved risk-adjusted returns—a critical metric for institutional capital allocating to alternative assets.
The conversion was executed seamlessly for existing shareholders, with automatic fund transitions requiring no investor action. Notably, Bitwise maintained unchanged expense ratios and tax treatment structures, avoiding friction that might otherwise trigger redemptions or tax-event complications. This operational design underscores the firm's commitment to transparency and shareholder continuity during the strategic pivot.
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