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Asset management firm Bitwise has recently kept one of its departments busy with paperwork. Less than 72 hours after filing for an XRP Exchange-Traded Fund (ETF), the asset manager submitted another application. This time, Bitwise has turned its attention to the world’s leading digital cryptocurrency, Bitcoin.

Bitwise’s new rotation strategy to balance risk and return

According to its announcement, the asset manager has strategically decided to convert its three crypto futures ETFs from "long-only" strategies. The new development will see its ETF rotate between crypto and U.S. Treasury exposure, depending on prevailing market trends.

This adjustment implies that when the market trend indicates increased volatility in the crypto space, the ETF will shift some or all of its investment into U.S. Treasuries. Equally, when market conditions favor Bitcoin more than treasuries, Bitwise will increase its allocation to crypto futures.

The approach serves as a hedge to derisk its investment. Usually, U.S. Treasuries are safer and lower-risk investments, and this move will give Bitwise more flexibility to reduce potential losses, notably when Bitcoin gets volatile or bearish. 

In essence, Bitwise aims to balance its higher-risk crypto futures and stable U.S. government bonds.

Product conversion and name changes set for December

The new conversion has been scheduled for Dec. 3, 2024. The ticker for the new filing will be BITC. However, the asset manager has stated that the names and strategies will be adjusted.

Bitwise Strategy Optimum Roll ETF will switch to Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF. A similar conversion applies to its Ethereum product, which will be known as Bitwise Trendwise Ethereum and Treasuries Rotation Strategy ETF. 

The last product will be Bitwise Trendwise BTC/ETH and Treasuries Rotation Strategy ETF.

Notably, this approach might help safeguard investors’ assets and balance risk and reward, especially for institutional players.