Crypto asset management firm Bitwise has unveiled a new suite of momentum-driven investment products designed to help investors navigate cryptocurrency market volatility while maintaining exposure to Bitcoin and Ethereum. These innovative "Trendwise" strategies automatically rotate between crypto futures and U.S. Treasuries based on proprietary technical indicators.
Understanding the Trendwise Investment Approach
Bitwise's Trendwise methodology employs technical analysis signals to determine optimal market entry and exit points. The strategy focuses on two key indicators:
- 10-day exponential moving average (EMA) of Bitcoin/Ethereum prices
- 20-day exponential moving average (EMA) of Bitcoin/Ethereum prices
When the 10-day EMA crosses above the 20-day EMA (indicating upward momentum), the funds allocate to crypto futures. When the opposite occurs (suggesting downward momentum), the funds automatically rotate into U.S. Treasury securities.
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Available Trendwise ETF Products
| ETF Ticker | Strategy Name | Expense Ratio |
|---|---|---|
| BITC | Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF | 0.88% net |
| AETH | Bitwise Trendwise Ethereum and Treasuries Rotation Strategy ETF | 0.90% net |
| BTOP | Bitwise Trendwise BTC/ETH and Treasuries Rotation Strategy ETF | 0.90% net |
Benefits of Momentum-Based Crypto Investing
- Downside protection during market downturns
- Automated rebalancing based on quantitative signals
- Improved risk-adjusted returns compared to buy-and-hold strategies
- Continuous market exposure without emotional decision-making
According to Bitwise CIO Matt Hougan: "These strategies capitalize on the well-documented momentum factor in crypto markets while helping investors avoid prolonged bear markets. Our backtesting shows promising results for risk-adjusted returns."
Implementation and Fund Details
- No action required for existing investors (automatic conversion)
- Same expense ratios maintained post-conversion
- Tax treatment remains unchanged from previous strategy
- Daily liquidity through normal ETF trading mechanisms
The firm emphasizes that while these strategies aim to reduce volatility, they still carry substantial risk and may underperform during strong bull markets when momentum signals prompt premature exits.
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Frequently Asked Questions
Q: How often do the Trendwise strategies rebalance?
A: The funds continuously monitor market conditions and may rotate between crypto and Treasuries multiple times per month based on the proprietary signals.
Q: What percentage of assets go into Treasuries during rotations?
A: The funds shift 100% of exposure either into crypto futures or U.S. Treasuries—there are no partial allocations under normal market conditions.
Q: Can these strategies guarantee profits?
A: No. While designed to improve risk-adjusted returns, there are periods where the strategy may underperform buy-and-hold approaches, particularly during volatile sideways markets.
Q: How does this differ from traditional stop-loss strategies?
A: The Trendwise approach uses sophisticated momentum indicators rather than simple price thresholds, potentially reducing whipsaw effects during normal market fluctuations.
Q: Are there tax implications from frequent rotations?
A: The futures-based structure helps minimize taxable events compared to spot market trading, but investors should consult their tax advisors about specific implications.
Risk Considerations
While the Trendwise strategies aim to reduce volatility, investors should carefully consider these risks:
- Momentum strategy underperformance during certain market conditions
- Futures contract pricing risks (contango/backwardation)
- Cryptocurrency volatility even during "risk-on" periods
- Interest rate risk for Treasury holdings
- Liquidity constraints in extreme market conditions
Bitwise President Teddy Fusaro notes: "We're providing tools for investors who want crypto exposure but with a more disciplined approach to risk management. These strategies represent another milestone in crypto investment sophistication."
About Bitwise Asset Management
Founded in 2017, Bitwise has grown to become one of the leading crypto asset managers with over $1 billion in assets under management. The firm offers:
- Active and passive crypto strategies
- Institutional-grade research
- Educational resources for financial professionals
- Multi-platform access including ETFs, SMAs, and private funds
With offices in San Francisco, New York, and London, Bitwise continues to expand its suite of digital asset investment solutions while maintaining a strong focus on investor education and risk management.