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 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 1.3% 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.