Bitwise Takes Over $267M Superstate Fund for DeFi Carry Strategy

Bitwise Asset Management is set to take over management of Superstate’s USCC fund on June 1, absorbing $267 million in assets and rebranding the vehicle as the Bitwise Crypto Carry Fund. The move marks a strategic expansion for Bitwise beyond its core index and ETF products into actively managed yield strategies that lean heavily on decentralized finance infrastructure.

The fund operates a crypto cash-and-carry trade: buying spot bitcoin or ether while simultaneously selling futures contracts to capture the premium. That premium, which can widen during bullish sentiment, generates a return that is largely market-neutral. What differentiates this fund is where the collateral sits. Over $100 million of the fund’s assets are deployed as collateral on DeFi lending protocols Aave and Kamino, adding a layer of on-chain yield on top of the basis trade.

The $267M Fund and Its Cash-and-Carry Core

Cash-and-carry has long been a staple of crypto hedge funds and proprietary trading desks. The strategy exploits the gap between spot prices and futures prices, which in crypto markets can be substantial due to funding rates on perpetual swaps or calendar spreads on dated futures. By going long spot and short futures, the trade locks in a spread that converges at expiry, delivering a yield that is uncorrelated to directional price moves.

For the USCC fund, now rebranded, the strategy is not novel. But the scale–$267 million–and the institutional wrapper provided by Bitwise change the accessibility equation. Bitwise is best known for its crypto index funds and its spot bitcoin ETF (BITB). Adding a carry fund broadens its lineup to include a product that appeals to investors seeking yield in a low-interest-rate environment, without taking outright long exposure.

Over $100M in DeFi: Aave and Kamino Exposure

The fund’s use of DeFi protocols as collateral venues is the more consequential detail. Aave is the largest lending protocol in crypto, with billions in total value locked, while Kamino is a newer Solana-based platform focused on concentrated liquidity and lending. Parking over $100 million in these protocols means the fund is earning lending yields and possibly liquidity provider fees, but it also introduces smart contract risk, oracle risk, and protocol governance risk.

For Bitwise, this is a deliberate step into on-chain yield generation, a space that has been dominated by crypto-native firms and decentralized autonomous organizations. The decision to retain the DeFi allocation rather than unwind it signals that Bitwise sees the risk-adjusted returns as acceptable and that its operational due diligence on Aave and Kamino passed muster. It also suggests that the fund’s investors–likely accredited or institutional–are comfortable with DeFi exposure, a notable shift from the custody-only model of most regulated fund structures.

Bitwise’s Product Expansion and the Tokenized Fund Race

The takeover fits into a broader trend of traditional asset managers tokenizing fund shares and integrating DeFi rails. Superstate itself is a blockchain-native asset manager that tokenizes fund shares on Ethereum, allowing for on-chain settlement and programmatic interactions. By acquiring the fund, Bitwise gains a ready-made tokenized fund structure and the operational know-how to run a DeFi-collateralized strategy.

This move comes as the tokenized Treasury market has grown to over $1 billion, and firms like BlackRock have launched tokenized money market funds. Bitwise’s entry into tokenized funds with a carry strategy adds a yield component that pure Treasury tokenizations lack. The next question is whether Bitwise will seek to wrap this strategy in an ETF or other ’40 Act fund structure, which would require SEC approval and likely a different collateral arrangement. For now, the fund remains a private placement.

The immediate decision point for market participants is whether this signals a broader acceptance of DeFi collateral among regulated fund managers. If Bitwise can successfully operate the fund without a smart contract exploit or regulatory pushback, it could pave the way for similar products from other issuers. Conversely, any incident involving the DeFi protocols would quickly test the risk management frameworks Bitwise has in place.

The fund’s performance and any subsequent filings will be the next concrete catalysts. For traders, the existence of a $267 million vehicle deploying capital into Aave and Kamino could also have a marginal impact on those protocols’ liquidity and yields, though the size is modest relative to total value locked. The more important signal is the direction of travel: regulated fund managers are no longer just holding crypto in cold storage; they are actively using DeFi to generate returns.