Overshadowed ETF A Crypto Trailblazer

Commodity ETF 'GCC’ is actually the first ETF to provide exposure to crypto assets through futures.

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Reviewed by: Jessica Ferringer
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Edited by: Jessica Ferringer

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.

TickerFundExpense RatioAUM
PDBCInvesco Optimum Yield Diversified Commodity Strategy No K-1 ETF0.59%$6.81B
FTGCFirst Trust Global Tactical Commodity Strategy Fund0.95%$2.04B
BCIabrdn Bloomberg All Commodity Strategy K-1 Free ETF0.25%$842.17M
COMBGraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF0.25%$278.39M
GCCWisdomTree Enhanced Commodity Strategy Fund0.55%$182.75M
BCDabrdn Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF0.29%$56.45M
SDCIUSCF SummerHaven Dynamic Commodity Strategy No K-1 Fund0.70%$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

Jessica Ferringer, CFA, is a writer and analyst for etf.com. She has 10 years of experience in investment research and due diligence, including helping to manage ETF portfolios. Jessica has a bachelor’s degree in economics from Lafayette College and an MBA from the University of Pittsburgh.