Bitwise has introduced an innovative approach to cryptocurrency exchange-traded funds (ETFs) with its proposal for the Bitwise Bitcoin Standard Corporations ETF. Filed on December 26, the fund is designed to invest specifically in publicly traded companies that have committed to the “Bitcoin standard,” meaning those that hold at least 1,000 BTC in their corporate treasuries.
Bitwise Focusing on Bitcoin Holdings Over Market Caps
This ETF stands apart from traditional funds, which generally weight holdings based on a company’s market capitalization. Instead, Bitwise plans to allocate weight according to the market value of each company’s Bitcoin reserves, capping the maximum weight of any individual company’s Bitcoin holdings at 25%.
This means that companies with larger Bitcoin hoards, like MicroStrategy, will have a greater influence on the ETF’s performance than firms with larger market caps but smaller Bitcoin holdings, such as Tesla. For instance, despite Tesla’s $1.42 trillion market cap, its 9,720 BTC holdings would place it at a lower weight in Bitwise’s ETF compared to MicroStrategy, which holds 444,262 BTC and has a market cap of $83.5 billion.
This unique approach to weighting highlights Bitwise’s aim to capitalize on the increasing trend of companies using Bitcoin as part of their corporate strategy. With the cryptocurrency having gained 117% in 2024 alone, it’s clear that Bitcoin is becoming an attractive asset for institutional investors.
A Surging Trend Among Public Companies
The launch of the Bitwise Bitcoin Standard Corporations ETF comes at a time when several public companies have been making headlines for their Bitcoin purchases. On December 16, KULR Technology Group made a significant move, investing $21 million to purchase 217.18 BTC. This decision contributed to a remarkable 40% surge in KULR’s stock price, which hit an all-time high of $4.80.
This shift towards Bitcoin as a corporate asset, aimed at boosting stock prices, is not only reshaping the financial landscape but also influencing the creation of new investment products. As Bitwise’s filing suggests, ETFs tied to companies that adopt Bitcoin reserve could become increasingly popular among investors seeking to capitalize on this trend.
The filing also comes on the same day that Strive, a firm founded by Vivek Ramaswamy, proposed a separate ETF focused on “Bitcoin Bonds.” This fund would invest in convertible bonds issued by firms like MicroStrategy, showcasing the growing diversity in Bitcoin-related ETFs.
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