By Zachary Stone
After several attempts at securing a spot Bitcoin ETF without success, leading crypto asset management platform Bitwise has launched Bitwise Bitcoin Strategy Optimum Roll ETF (BITC), a Bitcoin-linked ETF for investors who wish to invest for the long term.
Through BITC, investors will have access to a regulated and professionally managed platform where they can have exposure to Bitcoin. The platform’s design reduces pricing efficiencies likely to occur in Bitcoin-linked ETFs focused on shorter term investing.
A preferred Method of Bitcoin Investing
BITC is structured as an SEC-regulated, “1940 Act” ETF. This makes it attractive to most investors because studies reveal that 68% of advisors prefer exchange-traded funds as a means of investing in Bitcoin. It will also make tax reporting easier by issuing a Form 1099 instead of the typically longer and more complex K-1.
A key feature of the ETF is the “optimum roll” strategy which examines all contracts and then selects the contracts with the highest likelihood of long-term returns. According to Bitwise, this strategy has been used in other sectors such as oil and natural gas futures, and have outperformed strategies focused on front-month or near-month contracts over time.
“We believe this same strategy can apply to the bitcoin futures market as it continues to deepen and evolve. 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 company wrote in a press release.
Bypassing The Risk of Bitcoin Custody
BITC won’t only give institutions, advisors, and their clients a professional, regulated solution for adding exposure to bitcoin, but it’ll also serve as a viable option to Bitcoin custodying. Bitcoin custody in which investors trust a third party to hold their Bitcoin can be risky with the rampant hacks and attacks in the crypto space.
The custodian for Bitwise’s Bitcoin Strategy Optimum Roll ETF is BNY Mellon, and its distributor is Foreside Fund Services, LLC. With a monthly rebalance, the ETF will provide maximum risk reduction for investors while ensuring they enjoy maximum profit. This is just one of Bitwise’s investment tools for giving the public access to the crypto space.