Bitwise Asset Management has filed to launch a new exchange-traded fund (ETF) targeting public companies that maintain substantial Bitcoin reserves. This move reflects growing interest in Bitcoin as an asset for corporate treasuries.
Key Details of the Proposed ETF
The Bitwise Bitcoin Standard Corporations ETF will focus on companies that have adopted a “Bitcoin standard.” These firms must hold at least 1,000 Bitcoin in their corporate treasuries to qualify, according to the regulatory filing on December 26. Additional inclusion criteria include:
- Market Capitalization: Companies must have a minimum market cap of $100 million.
- Liquidity: A daily average trading volume of at least $1 million is required.
- Public Float: Firms must have a public free float of less than 10%.
Unlike traditional ETFs, which weight holdings based on market capitalization, this fund will prioritize the market value of Bitcoin reserves. Each stock’s weighting in the ETF will be capped at 25%.
For example, MicroStrategy, with its substantial 444,262 Bitcoin holdings, would receive a higher weighting in the fund than Tesla, which owns 9,720 Bitcoin, despite Tesla’s much larger market cap of $1.42 trillion compared to MicroStrategy’s $83.5 billion.
Surge in Corporate Bitcoin Investments
The ETF proposal comes amid a growing trend of public companies using Bitcoin to enhance shareholder value. Bitcoin has surged 117% in 2024, surpassing six figures for the first time in November. While it peaked at $108,000, the cryptocurrency is currently trading around $95,800.
Recent examples of corporate Bitcoin purchases include KULR Technology Group, which announced a $21 million acquisition of 217.18 Bitcoin on December 16. This news caused KULR’s stock price to jump over 40%, reaching an all-time high of $4.80.
Competitors Eye Bitcoin-Related ETFs
Bitwise isn’t alone in capitalizing on Bitcoin’s popularity. On the same day as Bitwise’s filing, Strive Asset Management, founded by Vivek Ramaswamy, proposed an ETF that would focus on “Bitcoin Bonds.” This fund plans to invest in convertible bonds from companies like MicroStrategy and others that hold significant Bitcoin assets.
Bitwise’s innovative ETF seeks to tap into the increasing role of Bitcoin in corporate finance. By focusing on companies with substantial Bitcoin reserves, the ETF offers investors a unique way to gain exposure to the cryptocurrency market without directly owning Bitcoin.
