Bitwise Proposes New ETF Investing in Bitcoin Standard Corporations
Bitwise has introduced a new exchange-traded fund that focuses on publicly traded companies with significant Bitcoin holdings in their corporate treasuries.
In a recent regulatory filing on Dec. 26, Bitwise announced the Bitcoin Standard Corporations ETF, which will invest in equity securities of publicly traded companies that have embraced the “Bitcoin standard” by holding at least 1,000 Bitcoin (BTC) in their corporate treasuries.
These securities include common stock, depositary receipts (both American Depositary Receipts and Global Depositary Receipts), tracking stocks, and other equity units issued by U.S. and non-U.S. companies, including those in emerging market countries.
Companies eligible for inclusion in the ETF must have a market capitalization of at least $100 million, average daily liquidity of $1 million, and a public free float of under 10%. These criteria will be evaluated based on quarterly and annual corporate reports.
Unlike traditional equity ETFs that prioritize market capitalization, the Bitcoin Standard Corporations ETF will weigh companies based on the market value of their Bitcoin holdings. This means that companies with larger Bitcoin reserves will have higher weights in the ETF, regardless of their overall market capitalization.
For example, Marathon Digital Holdings, with a substantial 44,000 BTC in reserves, will have a greater weighting in the ETF compared to Tesla, which holds 9,720 BTC, despite Tesla’s significantly larger market capitalization.
To ensure diversification and prevent overexposure to any single company, no stock will exceed a weighting of 25% in the fund.
Industry Response and Market Trends
Nate Geraci, President of the ETF Store, commented that the ETF could attract a significant number of companies vying for a spot in the index, reflecting the growing interest in Bitcoin among institutional investors.
Driven by Bitcoin’s strong performance this year, the financial industry has witnessed a surge in Wall Street-focused investment products catering to institutional investors seeking exposure to Bitcoin and other cryptocurrencies through regulated financial vehicles.
In addition to the Bitcoin Standard Corporations ETF, Bitwise has also proposed a Bitcoin-Ethereum mixed crypto ETF to U.S. regulators, aiming to provide investors with balanced exposure to the two largest cryptocurrencies by market cap.
Other companies, such as New York-based GraniteShares, have filed for leveraged ETFs tracking prominent companies with significant crypto exposure, including Riot Platforms, Marathon Digital, MicroStrategy, and Robinhood. Grayscale Investments has also filed to convert its Solana Trust into an exchange-traded fund.
The introduction of the Bitcoin Standard Corporations ETF and other crypto-focused investment products reflects the growing acceptance and integration of cryptocurrencies into traditional financial markets, providing investors with new avenues to gain exposure to this emerging asset class.