Bitwise Asset Management launched the Bitwise Bitcoin Strategy Optimum Roll ETF (NYSE Arca: BITC), a bitcoin-linked ETF designed specifically for long-term investors. The fund does not invest directly in bitcoin but instead provides directional exposure to bitcoin through regulated futures contracts. It also seeks to maximize potential roll returns through a selective analysis of bitcoin futures beyond front- or near-month contracts.
While desirable for traders with a short time horizon, a front-month methodology 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.
“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.”
Added Hougan: “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.”
The fund’s structure as an SEC-regulated, 1940 Act ETF will make bitcoin exposure available in a format 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.
“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 before adding that BITC provides “exposure to bitcoin returns while bypassing the risks of” directly holding bitcoin “or investing through novel platforms.”
BNY Mellon is the fund’s custodian. Its distributor is Foreside Fund Services. BITC is rebalanced monthly.
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