As a seasoned analyst with over two decades of experience in the financial markets, I find these new Bitcoin-focused ETFs intriguing, to say the least. My career has taken me through the dotcom bubble, the global financial crisis, and now, it seems, the dawn of a new digital age.
As a researcher, I’ve noticed an intriguing development: Two established asset managers, Bitwise and Strive, seem to be venturing into uncharted territories by proposing new Exchange-Traded Funds (ETFs) inspired by the burgeoning trend of companies incorporating Bitcoin into their treasury operations. Their filings with the US Securities and Exchange Commission (SEC) suggest these funds will primarily focus on Bitcoin, but they plan to differentiate themselves from existing options in the market as per their proposals.
Bitwise and Strive File for Unique Bitcoin-Focused Funds
It’s important to note that Bitwise currently oversees several well-known cryptocurrency ETFs. Yet, their new goal is to introduce a product they’ve named the “Bitcoin Standard Corporations ETF”.
According to Bitwise’s suggestion, this investment vehicle will be dedicated to purchasing stocks of firms adhering to the “Bitcoin Standard.” These are businesses with substantial Bitcoin holdings (over 1,000 BTC) along with minimum size and trading volume thresholds.
To be eligible, a company should possess the following three criteria:
Significantly, Bitwise’s latest ETF offers a unique characteristic: it employs a weighting method different from the traditional one. Rather than distributing investment amounts based on a company’s market capitalization, this ETF determines allocations according to the amount of Bitcoin that each company holds.
In simpler terms, this implies that funds with diverse Bitcoin investments will give more influence to smaller companies with substantial Bitcoin holdings compared to larger companies with fewer Bitcoin assets.
Instead of following a conventional method, Strive plans a distinctive route through its “Bitcoin Bond ETF”. This Vivek Ramaswamy-established company intends to employ the ETF for investing in convertible securities from companies like MicroStrategy, using the gained funds to acquire Bitcoin.
Fundamentally, Strive’s ETF primarily concentrates on particular assets or entities, while Bitwise adopts a significantly different methodology.
MicroStrategy, a trailblazer in corporate Bitcoin investments, is a typical company that the Strive Fund might focus on investing in.
Bitcoin Treasury Adoption Spreads
The surge in corporations investing in Bitcoin continues unabated. For instance, KULR Technology Group has caught attention with its purchase of $21 million worth of Bitcoin, intending to invest up to 90% of its excess funds into this digital currency. Although KULR’s holdings are not yet substantial enough for the Bitwise ETF, corporations like Tesla and Semler Scientific have already amassed sufficient amounts.
Nate Geraci, the President of ETF Store, observed that the influence of Bitcoin’s treasury management is expanding rapidly.
With increasing institutional acceptance of Bitcoin, these ETFs signify a rising interest among investors to explore forward-thinking methods for investment within this dynamic sector.
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2024-12-27 11:54