WisdomTree to Expand Investment Options with Bitcoin in Commodity ETF

WisdomTree, one of the major players in the financial industry, is considering the addition of Bitcoin (BTC) as part of its commodity exchange-traded fund (ETF), providing its customers with exposure to the crypto market without direct investment in the asset.

According to a recent document released on Tuesday, the company proposed allocating around 5% of the WisdomTree Enhanced Commodity Strategy Fund (GCC) to track the crypto asset while maintaining indirect exposure to the crypto asset.

WisdomTree to Diversify Its Portfolio with Bitcoin

The GCC, launched in December 2020, initially focused exclusively on four commodity sectors, including Energy, Agriculture, Industrial Metals, and Precious Metals, but may now include BTC.

“The Fund may also invest up to 5% of its net assets in bitcoin futures contracts. The Fund will not invest in bitcoin directly.”

However, according to a report from Trustnodes, the United States-based company with up to $94 billion in assets under management has already included Bitcoin as part of its GCC portfolio.

The report disclosed that the Fund currently holds around $4 million in BTC, making it a unique blend of traditional commodities like cattle and copper alongside the digital currency. In total, the ETF boasts about $200 million in assets.

In a similar move, the asset manager has also added Bitcoin to another ETF called Managed Futures Strategy Fund (WTMF). The WTMF, which previously invested in equities, commodities, and currencies, has allocated 5% of its net assets to bitcoin futures contracts, currently holding around $4 million worth of the crypto asset.

“The Enhanced Commodity Strategy Fund (“GCC”) and Managed Futures Strategy Fund (“WTMF”) each invest up to 5% of their net assets in bitcoin futures contracts. GCC and WTMF only invest in cash-settled bitcoin futures traded on the Chicago Mercantile Exchange, which is a futures exchange registered with the Commodity Futures Trading Commission,” the company said.

Asset Managers Embrace Bitcoin Investment Options

The move aligns with a broader trend of asset managers diversifying their investment options by incorporating BTC into their portfolios. Companies like BlackRock and Morgan Stanley have also recognized the potential benefits of adding Bitcoin to their balance sheet, with some opting for a 1% allocation.

Unlike WisdomTree, which decided to allocate 5% to Bitcoin, BlackRock and Morgan Stanley opted for a 1% allocation. The company’s strategy involves leveraging cash-settled futures from the Chicago Mercantile Exchange, a futures exchange registered with the Commodity Futures Trading Commission.

Similarly, Morgan Stanley and BlackRock are utilizing GBTC and cash futures, respectively, showcasing a growing interest in integrating Bitcoin into their investment portfolios.

WisdomTree to Liquidate Five ETFs

Meanwhile, while WisdomTree is expanding its investment options with Bitcoin, the asset manager has also decided to liquidate five of its ETFs.

In September, the company announced that it would close down the WisdomTree Chinese Yuan Strategy Fund, WisdomTree India ex-State-Owned Enterprises Fund, WisdomTree US Growth & Momentum Fund, WisdomTree Germany Hedged Equity Fund, and WisdomTree Growth Leaders Fund.

The ETFs ceased trading last week, with shareholders who failed to sell their assets during the specified timeline automatically having their assets redeemed for cash based on each ETF’s net asset value.

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2023-11-07 18:27