Yield is a function of timing. On December 24, 2025, Bitwise Asset Management finalized an annual distribution of $1.226 per share for the Bitwise Trendwise Bitcoin and Treasuries Rotation Strategy ETF ($BITC). This figure is not a traditional dividend derived from corporate earnings. It is the mathematical byproduct of a systematic exit from Bitcoin volatility into the relative safety of the U.S. Treasury market. For investors accustomed to the static ‘buy and hold’ mantra of spot Bitcoin ETFs, this distribution serves as a stark reminder that active risk management carries a unique price tag and a unique reward.
Technical Mechanics of the Trendwise Signal
The $BITC strategy operates on a binary logic gate. It is either 100 percent exposed to Bitcoin or 100 percent exposed to U.S. Treasuries. There is no middle ground. The fund utilizes a proprietary momentum signal based on the 10-day and 20-day exponential moving averages (EMA) of Bitcoin prices. When the 10-day EMA stays above the 20-day EMA, the fund remains in Bitcoin. When the trend reverses, the fund rotates. According to Bitwise SEC filings, this rotation is designed to minimize the catastrophic drawdowns that characterize the cryptocurrency market.
In 2025, this signal triggered three major rotations. The most significant occurred on December 12, 2025, when Bitcoin fell from its mid-month high of $102,400. The EMA crossover forced a total liquidation of Bitcoin holdings at an average price of $98,200. The proceeds were immediately moved into short-duration Treasury bills. This specific move protected the fund from the 7.7 percent slide in Bitcoin prices observed between December 13 and December 24, 2025. The $1.226 distribution is largely composed of the capital gains realized during these strategic exits, combined with the 4.2 percent yield currently offered by U.S. Treasury notes.
Deconstructing the Distribution Yield
The $1.226 payout represents roughly a 4.9 percent yield based on the fund NAV as of early December. However, investors must distinguish between yield and total return. Because $BITC rotates out of Bitcoin during downtrends, it often misses the initial ‘bounce’ phase of a recovery. This is the ‘slippage cost’ of protection. During the 2025 fiscal year, Bitcoin rose 38 percent. In contrast, $BITC returned 26.4 percent. The 11.6 percent underperformance is the insurance premium paid for avoiding the 22 percent drawdown seen in the second quarter of the year.
Comparative Performance Matrix (YTD 2025)
| Metric | $BITC (Rotation) | $IBIT (Spot BTC) | $TLT (Treasuries) |
|---|---|---|---|
| Annual Return | 26.4% | 38.0% | 4.1% |
| Max Drawdown | 9.2% | 22.4% | 6.5% |
| Volatility (Beta) | 0.45 | 1.00 | 0.12 |
The distribution itself is taxable. Because the fund rotates frequently, the majority of the $1.226 is classified as short-term capital gains. This is a critical distinction for high-net-worth investors holding the fund in taxable accounts. While the distribution provides liquidity, it does not offer the tax efficiency of a spot Bitcoin ETF, where gains are only realized upon the sale of the shares by the investor. Per Yahoo Finance data, the turnover rate for $BITC exceeded 400 percent in 2025, illustrating the high-frequency nature of the Trendwise model.
The Tax Drag and Execution Slippage
Data from the final quarter of 2025 indicates that the fund incurred approximately 45 basis points in execution slippage during the October rotation. When a fund with hundreds of millions in AUM moves from Bitcoin to Treasuries in a single trading session, it eats into the bid-ask spread. This ‘hidden cost’ is not reflected in the expense ratio but is visible in the tracking error relative to the underlying momentum index. Despite these costs, the fund managed to stay above its 200-day moving average for the entirety of the year, a feat that spot Bitcoin holders could not replicate.
The Treasury component of the fund also faced headwinds. With the Federal Reserve maintaining a ‘higher for longer’ stance through December 2025, the capital appreciation on the Treasury side was negligible. The fund was essentially parked in cash equivalents. This served its purpose as a volatility dampener, but it also meant that the $1.226 distribution was the only real ‘return’ generated during the periods when Bitcoin was crashing. It functioned as an automated stop-loss that pays the investor to wait for the next bull signal.
Institutional interest in rotation strategies has spiked following the December volatility. Unlike retail investors who may have the stomach for a 30 percent overnight drop, pension funds and family offices require the ‘floor’ that $BITC provides. The distribution announcement acts as a validation of the model. It proves that the fund can successfully harvest gains during periods of strength and convert them into tangible payouts rather than letting those gains evaporate in a market correction.
The critical data point for the start of 2026 is the January 15 rebalance threshold. Currently, Bitcoin is trading at $94,800, which is exactly 2.1 percent below the 20-day EMA. Unless Bitcoin recovers to the $97,000 level by mid-January, the Trendwise signal will remain in a ‘Risk-Off’ state, keeping the fund 100 percent in Treasuries. Investors should monitor the $97,250 price level as the primary pivot point for the next major asset allocation shift.
