Bitcoin, S&P Mix in New ETF Aimed at Easing Crypto's Wild Ride

Bitcoin, S&P Mix in New ETF Aimed at Easing Crypto's Wild Ride

Cyber Hornet's new product offers BTC's potential for gains with the stability of the S&P stock index.

Wealth Management Editor
Reviewed by: Staff
Edited by: Staff

As investors await an SEC ruling on a dozen ETF filings, at least one issuer has found a unique opening on the crypto bandwagon. 

Launched on the last trading day of 2023, the Cyber Hornet S&P 500 and Bitcoin 75/25 Strategy ETF (ZZZ) pairs the performance potential of bitcoin with the stability of the world’s most popular equity index. 

The fund has dropped to $20.55 since it began trading last week at $20.85 on the Nasdaq exchange. According to issuer Cyber Hornet ETFs’ fund page, ZZZ has $1.03 million in assets under management. 

Michael Willis, co-founder and chief executive of Cyber Hornet ETFs, said the idea for the ETF was sparked in June when BlackRock Inc., the world’s largest asset manager, joined the party by filing for a spot bitcoin fund. 

“We believe the BlackRock filing officially launched the bitcoin era on Wall Street, because with a spot bitcoin ETF, investors will have access to bitcoin in a very simple way,” Willis said.  

The exchange-traded fund is the first from Cyber Hornet ETFs, in what the company says will be a four-fund suite offering a range of ratios blending the S&P with bitcoin futures contracts. 

Bitcoin Exposure Without the Wild Ride 

Currently, the closest thing to bitcoin exposure in an ETF wrapper is a handful of funds that invest in bitcoin futures contracts. 

The Securities and Exchange Commission (SEC) is set to approve or deny the first spot bitcoin filing, with a ruling expected by Jan. 10. Scenarios include approval of a single applicant’s fund, to simultaneous approval of multiple applications, to denial or further delay. 

Willis believes his strategy carves out a niche for investors and financial advisors who might want exposure to the cryptocurrency space, but without the trademark extreme volatility. 

In a rudimentary back test, pairing a 75% weighting in the S&P 500 with a 25% allocation to bitcoin futures contracts that are rebalanced monthly, the new ETF appears as a decent compromise for nervous investors. 

In 2014, for example, when the S&P was up 13.4% and bitcoin fell 58.4%, the 75/25 model would have lost 7.6%. 

In 2022, when correlation was punishing virtually across the board leading to an 18.1% loss for the S&P and a 64.3% decline for bitcoin, the 75/25 strategy would have lost 31.3%. Not great news for investors, but possibly easier to stomach than a pure-play 64% drop. 

In years when bitcoin has rallied, the story of smoother returns is similar. 

Bitcoin jumped by 305% in 2020, while the S&P gained 18.3%, which would have pushed the 75/25 strategy up 68%. 

 “We don’t think people can handle 60% or 70% drops, but we think this will open up to a much wider audience of crypto investors,” Willis said. “We can go to advisors and say we have a turnkey ETF solution to meet client demand for bitcoin.” 

Contact Jeff Benjamin at [email protected] and find him on X at @BenjiWriter         

Jeff Benjamin is the wealth management editor at, responsible for coverage related to the financial planning industry. This includes writing, hosting podcasts, webinars, video interviews and presenting at in-person events.

Jeff is a veteran journalist with more than 30 years’ experience covering the financial markets. He has won more than two dozen national and regional awards for his reporting. He most recently worked as a senior columnist at InvestmentNews where he wrote about investment products and strategies, as well as the broader financial planning industry. Prior to that, Jeff worked as an analyst at Cerulli Associates where he researched and wrote reports on the alternative investments industry. Jeff also worked as a money management reporter at Dow Jones Newswires, where he covered the mutual fund industry.

Based in North Carolina, Jeff is a former Marine and has a bachelor’s degree in journalism from Central Michigan University.