Bitwise refiles for Bitcoin Strategy Optimum Yield ETF in face of crypto meltdown
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Even as the cryptocurrency market reels from a series of high-profile failures, digital asset manager Bitwise (BITW) has filed a prospectus to launch a Bitcoin Strategy Optimum Yield ETF, betting on continued interest in the sector despite The FTX bankruptcy and other massive setbacks for the industry in recent months.
Bitwise submitted an initial proposal in September 2021, but withdrew the application in November 2021 due to the high price tag and complexity of the proposed product. Last week, the company filed a new prospectus with the US Securities and Exchange Commission, reviving the effort to bring the ETF to market.
The company plans for the fund to trade under the symbol BITC.
As is standard with many Bitcoin ETFs, BITC will not hold cryptocurrencies directly. Instead, it will offer managed exposure to Bitcoin futures contracts traded on the Chicago Mercantile Exchange and investments in short-term debt securities.
According to the filing, BITC’s strategy is designed so that instead of the futures contracts automatically rolling into the next available contract based on a predefined schedule, it will roll into the one that “shows the highest implied return under current market conditions.”
The first Bitcoin futures ETF Bitcoin Strategy ETF (BITO) was approved in October 2021, with the investment vehicle generating over $1B in trading volume in its first day.
However, BITO has suffered with the rest of the crypto ecosystem in 2022. It has lost approx. 73% of the value over a period of one year.
The crypto space has recently come under fire following the fall of FTX and Genesis’ bankruptcy warning. That trend has continued recently, when BlockFi announced early Monday that it had filed for bankruptcy protection.
All major cryptocurrencies were down in Monday’s trading, with Dogecoin (DOGE-USD) falling 9.8%Ripple (XRP-USD) is falling 4.6%Uniswap (UNI-USD) floating 5.6%Ethereum (ETH-USD) pulls back 4%and Litecoin (LTC-USD) falling 2.3%.
Movement of ETFs in Crypto Space: ProShares Bitcoin Strategy ETF (BITO) -2.75%Valkyrie Bitcoin Strategy ETF (BTF) -2.8%VanEck Bitcoin Strategy ETF (XBTF) -2.3%Invesco Alerian Galaxy Crypto Economy ETF (SATO) -8.3%Global X Blockchain & Bitcoin Strategy ETF (BITS) -4.4%Global X Blockchain ETF (BKCH) -5.4%VanEck Vectors Digital Transformation ETF (DAPP) -5.2%and Bitwise Crypto Industry Innovators ETF(BITQ) -4.76%, Grayscale Bitcoin Trust (OTC:GBTC) -3.1%.
Crypto-Related Stock Movements: Marathon Digital (MARA) -4.1%Riot Blockchain (RIOT) -4.3%Coinbase (COIN) -3.7%Bitfarms (BITF) -5%, BitNile (NILE) -7.2%, Robinhood (HOOD) -2.2%.
For more in-depth analysis of Bitcoin, read Seeking Alpha contributor Pinxter Analytics, which says that a large portion of holdings in Bitcoin and cryptocurrencies can turn ugly quickly.
