Overshadowed ETF A Crypto Trailblazer

October 21, 2021

Though the ETF world has been focused on the race to launch the first bitcoin futures ETF, an honor that went to the ProShares Bitcoin Strategy Fund (BITO), it’s another fund that holds the title of first ETF to provide any exposure to crypto assets through bitcoin futures.

On Oct. 15, the WisdomTree Enhanced Commodity Strategy Fund (GCC) received approval to add up to a 5% allocation to bitcoin futures to the fund. The issuer added an approximate 3% allocation to cash-settled bitcoin futures after market close that day.

While WisdomTree currently has a filing for a physical bitcoin ETF, Jeremy Schwartz, global head of research, feels that bitcoin futures are appropriate for use within a diversified commodity strategy.

He states: “For a 3% allocation, we’re very comfortable with using futures. As we thought about a 100% strategy that is bitcoin only, that is where we have a strong preference for the physical. All commodities have questions of backwardation and contango and the futures curve.”

Active Management Matters

A benefit of GCC relative to other commodity funds is that it is actively managed, meaning that it has flexibility with contract selection to help manage the roll yield inherent in futures investments.

According to data from FactSet, there are currently seven active broad market commodity ETFs available.

Ticker Fund Expense Ratio AUM
PDBC Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF 0.59% $6.81B
FTGC First Trust Global Tactical Commodity Strategy Fund 0.95% $2.04B
BCI abrdn Bloomberg All Commodity Strategy K-1 Free ETF 0.25% $842.17M
COMB GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF 0.25% $278.39M
GCC WisdomTree Enhanced Commodity Strategy Fund 0.55% $182.75M
BCD abrdn Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF 0.29% $56.45M
SDCI USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund 0.70% $8.21M


Digital Gold Preferred

The addition of bitcoin futures to GCC makes sense, as it is often viewed as “digital gold,”  a more modern store of value relative to the precious metal. Many have speculated that the lackluster performance and outflows for the SPDR Gold Trust (GLD) over the past year in spite of inflation worries is largely due to the availability of cryptocurrencies.

The ETF Fund Flows tool shows that year-to-date, GLD has seen over $10 billion in outflows.

Meanwhile, bitcoin’s market cap has grown to over $1.2 trillion as it hits all-time highs in the wake of BITO’s launch­­­. It is the largest cryptocurrency. The second largest coin by market cap is Ethereum, standing at $466 billion.

Contact Jessica Ferringer at [email protected] or follow her on Twitter

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