WisdomTree Adds Bitcoin Futures Exposure to Fund, Refiles for Spot ETF

The BTC futures addition was made to WisdomTree’s commodities-focused Managed Futures Strategy ETF.

AccessTimeIconJan 7, 2022 at 4:56 p.m. UTC
Updated Feb 1, 2022 at 5:58 p.m. UTC

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WisdomTree, an asset manager with over $76 billion in assets under management, announced Thursday that it had added bitcoin futures exposure to its commodities-focused Managed Futures Strategy exchange-traded fund (ETF).

The move comes a month after the U.S. Securities and Exchange Commission (SEC) rejected WisdomTree’s application for a spot bitcoin ETF, though the company has since refiled.

Last fall, WisdomTree indicated plans to add up to a 5% bitcoin futures exposure to the Managed Futures Strategy Fund, which was launched in 2011 and has about $164 million in assets. The company has now added an approximate 1.5% allocation to bitcoin futures contracts. The fund has no plans to invest in bitcoin directly.

WisdomTree isn’t new to giving bitcoin futures exposure to its fund, having added a 3% allocation to its Enhanced Commodity Strategy Fund (GCC) in October.

“Our view was that bitcoin is serving a role similar to gold and why people buy gold in commodities strategies,” said Jeremy Schwartz, global chief investment officer of WisdomTree, in an interview with CoinDesk.

WisdomTree is embracing a long investment strategy with bitcoin futures. “Right now, we are not going short on bitcoin futures. We think there is more risk [in shorting] given the volatility,” said Schwartz.

The SEC has created a path for bitcoin futures funds to go public. The ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF began trading in October and VanEck debuted a fund the following month.

Spot bitcoin ETFs, however, have faced much stronger regulatory resistance. WisdomTree and VanEck have both had their applications denied, and the SEC this week delayed a decision on NYDIG’s spot ETF filing. SEC Chair Gary Gensler has indicated a number of times that he prefers a bitcoin futures ETF over a fund with direct bitcoin exposure.

“We’ve said that for a 100% bitcoin fund, we prefer the spot. We have not filed for a 100% futures [fund]. For a 3% to 5% position, we think that futures are a reasonable access tool. But for a 100% position, we think that you want the spot,” said Schwartz. “We’re making our filings as strong and compelling as possible, and you’ve got to get over the different issues from the SEC.”

CORRECTION (Jan. 10, 23:16 UTC): Corrects allocation in third paragraph to 1.5% from 1.3%.

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