Bitwise's Trendwise ETFs swap long-only crypto for rotation

Bitwise Asset Management has converted three crypto futures ETFs into tactical vehicles that rotate between cryptocurrency exposure and US Treasuries, according to ETF Strategy. They are the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF, the Ethereum and Treasuries Rotation Strategy ETF, and the BTC/ETH and Treasuries Rotation Strategy ETF. The strategy compares a short-term exponential moving average with a longer one. The shorter average covers 10 trading days; the longer covers 20.

When the shorter average runs above the longer one, the funds put all their capital into crypto futures. Flip the averages, and they sell the crypto and park the portfolio in Treasuries. That is the off switch most crypto vehicles lack.

The conversion was investor-led, according to Bitwise chief investment officer Matt Hougan. "Investors tell us they want smart exposure to crypto's potential," he said in the ETF Strategy report. Hougan described the change as a response to demand, not a retreat from the asset class.

The fee stays at 0.85%, and Bitwise says the change has no tax consequences. Existing shareholders get the new strategy without a forced redemption, a meaningful detail in a fund where capital-gains control is one of the selling points.

The active ETF wrapper made this possible without a restart. Bitwise took a futures book that was passive in name and converted it into a rules-based tactical strategy, with no liquidation, no new ticker, and no rebuild of the shareholder base. For the firm, that is repurposed infrastructure. For allocators, it is a reminder that the strategy inside a ticker can change.

Momentum rules have a spotty record in crypto. The asset class whipsaws, and this crossover can fire falsely in a choppy tape. Bitwise's bet is that the downside protection is worth the missed upside when a trend turns violently. The 2018 bear market is the sort of drawdown the rule is built to sidestep. The 2022 crypto winter is another.

The conversions come after a strong year for Bitwise. The firm launched its first spot Bitcoin and Ethereum ETFs in 2024 and expanded into Europe by acquiring ETC Group. The Trendwise vehicles give it a third product line: actively managed futures with a built-in exit, something the spot ETFs cannot offer.

Whether investors treat these funds as core crypto holdings or as satellite positions is the open question. A fund that rotates into Treasuries during a downtrend is still a crypto fund, just one built to limit losses. For advisors who have struggled to size crypto allocations without losing sleep, the rulebook is familiar. The next sustained drawdown will show whether it works.