One fund issuer is continuing to work on a new investment product linked to bitcoin despite the historic turbulence in cryptocurrency markets caused by FTX’s collapse.
The Bitcoin Strategy Optimum Yield ETF, which would trade under the ticker BITC, was proposed by Bitwise on Wednesday. According to the petition, the fund would provide managed exposure to short-term debt instruments and investments in Bitcoin futures contracts traded on the CME. Since the US Securities and Exchange Commission has not yet approved such a product, it would not hold the token directly.
The filing did not include a fee schedule for the fund’s management.
“This is as much a signal as a filing — Bitwise is telling their clients and the rest of the world that despite the dark days, Bitcoin is alive and well and they still believe in the future,” said Eric Balchunas at Bloomberg Intelligence.
The sudden collapse of the once-loved FTX digital-assets exchange has caused havoc for other industry players who had already been shaken by several crises earlier in the year, putting the crypto market through one of its most turbulent periods. All kinds of token prices have decreased, including those for Bitcoin and Ether, the two biggest by market value. On Friday, the price of bitcoin was around $16,500, down from nearly $69,000 a year earlier. Ether traded above $4,000 in December of last year and was circling around $1,180 today.
According to the filing, BITC’s strategy is set up so that its futures contracts roll into the contract that “exhibits the highest implied roll yield under current market conditions,” as opposed to automatically rolling into the next-available contract based on a predefined schedule.
When ProShares introduced its Bitcoin Strategy ETF last year, US investors received their first Bitcoin futures ETF (ticker BITO). This year, the price of that fund closely followed the price of Bitcoin, which has fallen by about 64% since the beginning of 2022.
