Bitwise Asset Management, which still hopes to someday launch an SEC-approved spot product for exchange-trading bitcoin, announced on Tuesday the launch of what it says is a new type of bitcoin futures ETF aimed at long-term investors.
According to a registration statement filed with the SEC on Feb. 6, the Bitwise Bitcoin Strategy Optimum Roll ETF will seek to achieve its investment goal through managed access to bitcoin futures contracts and investments in short-term debt securities.
According to a press release from crypto asset manager Bitwise, the ETF is designed to offer investors access to bitcoin in a way that minimizes the pricing inefficiencies that can occur in bitcoin-related ETFs focused on near-month or near-month futures contracts. . Futures contracts with the next month have an earlier expiration date.
Research shows that the pre-month methodology, while desirable for traders with a short time horizon, can lead to rollover costs that significantly affect long-term results, the release says. Carryover costs arise when converting a short-term contract to a longer-term contract for the same asset. The new ETF aims to solve this problem with a “best throw” strategy that considers all available contracts and selects those with the lowest contango, according to the release. The SEC said in a statement that the market is in contango when a bitcoin futures contract trades at a price higher than the bitcoin spot price.
“Historically, optimal scrolling strategies in other asset classes, such as oil and natural gas futures, have outperformed strategies focused on near-month or near-month contracts over time,” Bitwise CIO Matt Hougan said in a press release. release. “We believe the same strategy could apply to the Bitcoin futures market as it continues to deepen and develop.”
The fund’s net expense ratio is 85 basis points, a spokesperson for Bitwise confirmed. The firm does not disclose assets under management, he said.
In an order dated June 29, the SEC rejected a proposed change to the rules for listing and trading shares of the Bitwise Bitcoin ETP Trust, proposed by ETP for spot Bitcoin. Currently, Bitwise sees no prospects for such spot Bitcoin products in the SEC, Mr. Hogan said in an emailed comment. Pensions and investments last week.
“We continue to monitor the situation and plan to reapply when the time is right,” he said at the time. “In the meantime, we will continue to help financial advisors, family offices and institutions access the market through other product structures.”