During a recent interview, WisdomTree’s Global Chief Investment Officer Jeremy Schwartz said that Bitcoin plays a similar role to gold.
Summary
The WisdomTree ETF
WisdomTree is a $76 billion-plus asset manager, and last Thursday announced that it has added exposure to Bitcoin Futures to its commodity-focused ETF, called Managed Futures Strategy.
The intention is to add exposure to Bitcoin-related Futures to this fund of up to 5% of the fund’s total value, but without investing directly in BTC. For now, it has added an approximate allocation of 1.3%.
Back in October, it added a 3% allocation to Bitcoin Futures to its Enhanced Commodity Strategy Fund (GCC).
Schwartz revealed that many investors buy gold as part of their commodity strategies, and since Bitcoin plays a similar role to gold, they decided to include it in their commodity ETF as well.
WisdomTree and Bitcoin ETFs
He also revealed that right now their position on the price of BTC is not short, because WisdomTree is adopting a long strategy on Bitcoin Futures investments.
The curious thing is that about a month ago the SEC rejected a specific request from WisdomTree to issue a spot ETF on Bitcoin.
According to Schwartz, for a fund linked 100% to the price of Bitcoin they would prefer a spot ETF, but for a position between 3% and 5%, they believe Futures are a reasonable entry tool.
Bitcoin ETFs
There are now therefore three different types of Bitcoin-related ETFs.
The first and most classic one is the ETFs collateralized directly in BTC and called “spot ETFs on Bitcoin”. In the US none have yet been authorized, but there are several traded for example on the Canadian exchange in Toronto.
Then there is the more complex type of ETF based 100% on Futures contracts on the price of BTC, which are mainly in circulation on the US markets.
Then there is a third type of ETFs, which do not have a 100% allocation to BTC, but which allocate an often marginal percentage of their capital to positions on the price of Bitcoin, e.g. through the same Futures contracts as above.
The fact that BTC enters the basket of commodities on which some ETFs are based, and that it does so at a time when its price has fallen by 40% from its all-time high two months ago, may suggest that a new era is beginning for Bitcoin, which is increasingly seen as an attractive financial asset also for traditional finance.
