The strategy, which leverages decades of research on commodities pricing, seeks to mitigate contango for long-term investors by investing selectively in bitcoin futures across the entire futures curve
Bitwise Asset Management, one of the world’s leading crypto asset managers, announced the launch of the Bitwise Bitcoin Strategy Optimum Roll ETF. The fund was built to offer investors regulated, professionally managed exposure to bitcoin with a unique design that minimizes pricing inefficiencies that can emerge in bitcoin-linked ETFs focused on front-month or near-month futures contracts.
“We believe this same strategy can apply to the bitcoin futures market as it continues to deepen and evolve. With the Bitwise Bitcoin Strategy Optimum Roll ETF, we’re excited to cater to long-term-oriented investors looking for regulated vehicles to gain directional bitcoin exposure.”
Research shows that a front-month methodology, while desirable for traders with a short time horizon, can generate roll costs that significantly weigh on long-term performance. BITC aims to address this challenge by using an “optimum roll” strategy that considers all available contracts and intelligently selects the contracts with the lowest level of contango (or the highest level of backwardation) in an effort to maximize long-term returns.
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“Historically, optimum roll strategies in other asset classes, such as oil and natural gas futures, have outperformed strategies focused on front-month or near-month contracts over time,” said Bitwise CIO Matt Hougan. “We believe this same strategy can apply to the bitcoin futures market as it continues to deepen and evolve. With the Bitwise Bitcoin Strategy Optimum Roll ETF, we’re excited to cater to long-term-oriented investors looking for regulated vehicles to gain directional bitcoin exposure.”
Importantly, the fund’s structure as an SEC-regulated, “1940 Act” ETF will make bitcoin exposure available in a format overwhelmingly favored by financial professionals. A recent Bitwise/VettaFi survey of financial advisor attitudes toward crypto found that exchange-traded funds were the preferred method of crypto investing for 68% of advisors. Moreover, for tax reporting, the fund will issue a Form 1099 instead of the typically longer and more complex K-1.
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“If there’s anything this past year has reinforced, it’s that how you invest in crypto is as important as what you invest in,” said Bitwise CEO Hunter Horsley. “The Bitwise Bitcoin Strategy Optimum Roll ETF gives institutions, advisors, and their clients a professional, regulated solution for adding exposure to bitcoin returns while bypassing the risks of custodying bitcoin directly or investing through novel platforms.”
The custodian of the Bitwise Bitcoin Strategy Optimum Roll ETF is BNY Mellon and the fund’s distributor is Foreside Fund Services, LLC. The ETF is rebalanced monthly.
The launch of the Bitwise Bitcoin Strategy Optimum Roll ETF (ticker: BITC) is part of Bitwise’s broad suite of professional investment solutions for accessing the opportunities in the fast-evolving crypto market. Today, Bitwise’s suite of more than 20 products includes the Bitwise Crypto Industry Innovators ETF (ticker: BITQ), Bitwise Web3 ETF (ticker: BWEB), Bitwise 10 Crypto Index Fund (ticker: BITW), private placement funds, multi-strategy solutions, and separately managed accounts. The number of RIAs, advisor teams, family offices, and institutions that rely on Bitwise for their clients’ crypto exposure doubled in 2022 to over 1,500 firms, who navigate crypto with the support of Bitwise’s nationwide distribution and client service team.
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