Bitwise to liquidate six crypto option ETFs after payout scrutiny
Bitwise is winding down six crypto option ETFs that returned investors' capital as yield, with cash redemptions in August.
Bitwise is liquidating six cryptocurrency-linked option exchange-traded funds, following an assessment that their distributions consisted largely of investors' own capital rather than genuine income. All six funds reported a 0% 30-day SEC yield, according to the announcement.
The affected funds had previously advertised high payout rates, with at least one offering a 25% yield. However, those payouts were funded by returning principal, making the income figure misleading. The 0% yield now confirms the strategies generated no real returns for holders.
Automatic cash redemption in August
Investors still holding shares in any of the six ETFs will receive an automatic cash redemption in August, likely at net asset value. The liquidation means the funds will cease trading and be delisted from their respective exchanges.
The move reflects ongoing challenges for crypto option income strategies, which have seen reduced premium income as market volatility declined. Bitwise has not indicated whether it plans to launch alternative products, but continues to manage other crypto-focused funds.