Bitcoin

Standard

Parallel

Bitwise Asset Management, a prominent exchange-traded fund (ETF) issuer, <a href="https://www.sec.gov/Archives/edgar/data/1928561/000121390024112714/ea0225863-02_485apos.htm">filed</a> to launch a new ETF that would focus on companies holding significant amounts of Bitcoin. The Bitwise Bitcoin Standard Corporations ETF would allow investors to tap into the growing trend of businesses adopting Bitcoin as a key asset within their corporate treasuries.&nbsp;
This move also comes as other financial institutions, like Strive Asset Management, aim to capitalize on Bitcoin's rising role in corporate strategy and investment portfolios.
<h2 id="strong-what-sets-the-bitcoin-standard-company-etf-apart-strong">What Sets the Bitcoin Standard Company ETF Apart?</h2>
Instead of considering the size of a company’s market cap, the ETF would assign weight to its holdings based on the value of the company’s Bitcoin reserves. However, the weight of each company in the fund would be capped at 25% to maintain a balanced structure.&nbsp;
This means that firms like MicroStrategy, which holds a massive 444,262 BTC, could have a larger influence on the ETF than companies with larger market caps, such as Tesla, which holds significantly fewer BTC (around 9,720).
<h3 id="strong-criteria-for-inclusion-in-the-etf-strong">Criteria for Inclusion in the ETF</h3>
To be eligible for inclusion in the Bitwise Bitcoin Standard ETF, a company must meet specific criteria. First, it must hold at least 1,000 BTC in its corporate treasury.&nbsp;
Second, the company must have a market capitalization of at least $100 million, ensuring that only businesses with a certain level of stability and size are considered. Additionally, the company must maintain a minimum daily liquidity of $1 million and a public free float of under 10%.
This structure allows the fund to focus specifically on businesses that have integrated Bitcoin into their operational strategies, distinguishing it from other funds that primarily track traditional stock performance metrics.
<h2 id="strong-bitcoin-s-role-in-corporate-strategies-strong">Bitcoin’s Role in Corporate Strategies</h2>
Over the past few years, Bitcoin has increasingly been seen as a valuable asset for companies, particularly as a hedge against inflation and market volatility. Many high-profile companies, such as MicroStrategy, have adopted Bitcoin as a central component of their treasury strategy. The company's aggressive Bitcoin acquisition strategy has set a precedent for other firms looking to gain exposure to the cryptocurrency's potential upside.
This trend is not limited to large enterprises. Smaller companies, like KULR Technology Group, have also begun investing in Bitcoin to boost their stock prices. In fact, KULR's recent purchase of 217.18 BTC for $21 million led to a remarkable 40% increase in their stock value, illustrating the tangible benefits Bitcoin can bring to a company's financial performance.
Bitcoin’s recent price surge, rising 117% in 2024, has further validated the strategic value of holding Bitcoin for businesses. As Bitcoin continues to soar—reaching a record high of <a href="https://coinmarketcap.com/currencies/bitcoin/">$108,000</a> in December—companies that hold significant amounts of Bitcoin are reaping the rewards, while new corporate adopters are taking notice of its potential.
<h2 id="strong-the-strive-bitcoin-bond-etf-a-parallel-approach-strong">The Strive Bitcoin Bond ETF: A Parallel Approach</h2>
On the same day as Bitwise’s filing, Strive Asset Management made headlines with its own <a href="https://www.sec.gov/Archives/edgar/data/1592900/000159290024002726/strivebitcoinbondetf485a.htm#if4d9d597075948f9b53e5fa50ac9dcb7_16">filing</a> for a Bitcoin-focused ETF.&nbsp;
The Strive Bitcoin Bond ETF would invest in convertible bonds issued by companies with substantial Bitcoin holdings, like MicroStrategy. These bonds are specifically designed to raise funds for additional Bitcoin purchases, thereby increasing the companies’ exposure to the cryptocurrency.
Strive’s ETF will focus 80% of its investments on Bitcoin Bonds and related derivative instruments, including swaps and options. This strategy aims to provide investors with indirect exposure to Bitcoin by leveraging corporate bonds linked to Bitcoin holdings. Unlike Bitwise’s fund, Strive’s ETF will actively manage its investments and make decisions based on the cost and return potential of these Bitcoin-linked bonds.
Both the Bitwise Bitcoin Standard ETF and the Strive Bitcoin Bond ETF reflect the increasing institutional interest in Bitcoin and its growing acceptance as a corporate asset. While Bitwise’s ETF focuses on companies directly holding Bitcoin, Strive’s ETF provides exposure to companies whose Bitcoin investments are reflected through convertible bonds.&nbsp;

Bitwise Files to Launch Bitcoin Standard ETF Targeting Companies with Large Bitcoin Holdings

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