The Final Curtain for Bitwise Option-Income ETFs

Bitwise Asset Management has officially concluded trading for six of its crypto-linked option-income ETFs, signaling a major shift in its product lineup. Following a decision by the Bitwise Funds Trust board, these specialized products—which tracked assets like Coinbase, Ethereum, and MicroStrategy—are now undergoing a complete liquidation process. Investors who remained in the funds past the July 31 trading deadline will receive cash redemptions based on the final net asset value of their holdings.

Liquidation Timeline and Cash Redemption

The liquidation process transitioned from active trading to automatic redemption following the close of business on July 31. Shareholders who held their positions into August are no longer able to execute trades at a chosen market price. Instead, Bitwise has scheduled a final net asset value (NAV) calculation for August 7, with the resulting cash distributions expected to reach brokers by August 10. This structured exit ensures that all remaining assets are returned to investors as cash, though it also requires shareholders to recognize any resulting capital gains or losses for tax purposes.

Performance Challenges and Return of Capital

The decision to liquidate comes amid significant performance hurdles and complex distribution structures for the affected funds. While the ETFs advertised high distribution rates—some as high as 25%—official filings showed a 30-day SEC yield of 0%, indicating that the funds were not generating traditional income. Bitwise characterized nearly all recent payouts as a "return of capital," meaning investors were essentially being paid back with their own original investments rather than fund profits. With cumulative returns since inception falling as much as 66% for certain funds, the liquidation marks the end of an experimental strategy that struggled to find footing in the volatile crypto-derivative market.