The cryptocurrency market is in constant motion, and the recent news of two new Exchange Traded Funds (ETFs) focused on companies that hold Bitcoin in their corporate treasuries demonstrates the increasing adoption of cryptocurrency by large corporations. This trend opens up new opportunities for investors who want to indirectly gain exposure to Bitcoin through public companies.
Amidst ongoing debates about Bitcoin’s volatility, investing in companies with BTC reserves is emerging as an interesting alternative strategy. Instead of directly purchasing the cryptocurrency, investors acquire shares in companies that hold Bitcoin on their balance sheets.
Bitwise, an asset manager already known for its cryptocurrency ETFs, has proposed the Bitwise Bitcoin Standard Corporations ETF. This fund would invest in companies that have adopted what they call the “Bitcoin Standard.” These are companies that hold over 1,000 BTC and meet certain size and liquidity criteria, such as a market capitalization of over $100 million and average daily liquidity of over $1 million.
One interesting difference is that the weighting of the stocks in this ETF would not be based on the market capitalization of the companies, as is common in traditional ETFs, but rather on the value of their Bitcoin holdings. This means that a smaller company with a large amount of Bitcoin in its treasury could have a higher weighting in the ETF than a larger company with a smaller BTC holding.
Another proposal comes from Strive, an asset manager co-founded by Vivek Ramaswamy. The Strive Bitcoin Bond ETF seeks exposure to convertible bonds issued by MicroStrategy and other companies that invest a significant portion of their profits in buying Bitcoin. Unlike Bitwise’s offering, this ETF is classified as “non-diversified,” allowing for a greater concentration of assets from a single issuer.
MicroStrategy, known for its large Bitcoin treasury, is explicitly mentioned in the fund’s prospectus, which aims to gain exposure to convertible securities issued by MicroStrategy Incorporated or other companies that Strive expects to invest all or a significant portion of their proceeds to purchase Bitcoin (collectively, “Bitcoin Bonds”).
The introduction of these new ETFs to the market could represent a significant milestone in the adoption of Bitcoin. At the time of publication, the price of BTC was quoted at US$96,423.60, with a 1.1% increase in the last 24 hours.
Tags: Bitcoin, ETF