Bitwise has proposed the creation of a new fund intended to track the share price of companies with significant exposure to Bitcoin.s. The Bitcoin Standard Corporations ETF will track companies that own not less than 1,000 BTC as cash reserves in their corporate balance sheets today.
According to a regulatory filing on Dec 26, Eligible companies must meet strict criteria, including a minimum market capitalization of $100 million and an average daily liquidity of $1 million. Additionally, they must have a public float below 10%. This ETF aims to capture companies embracing the “Bitcoin standard” by prioritizing Bitcoin reserves over traditional metrics like overall market capitalization.
Bitwise unique approach to ETF weighting
Unlike traditional equity ETFs, Bitwise’s fund will assign weightings based on the market value of a company’s Bitcoin holdings. However, to ensure diversification, no single company will exceed a 25% cap. For example, Tesla, despite its $1.42 trillion market cap, would carry less weight in the ETF than MicroStrategy.
Tesla holds 9,720 BTC, while MicroStrategy holds 444,262 BTC, giving the latter a higher weighting in the fund. This unique approach emphasizes Bitcoin reserves over overall company size, catering to investors seeking exposure to Bitcoin-focused firms.
Rising interest in Bitcoin investment funds
The filing comes amid growing institutional interest in regulated crypto investment vehicles. President of the ETF Store, Nate Geraci, noted that the ETF could attract numerous companies eager to qualify for inclusion.
Bitwise’s proposal aligns with a wave of Wall Street products designed to meet the increasing demand for cryptocurrency exposure. The company also filed a Bitcoin-Ethereum mixed ETF in November, aiming to offer balanced exposure to the two largest cryptocurrencies.
On the same day, a firm founded by Vivek Ramaswamy, Strive, announced plans for an ETF investing in “Bitcoin Bonds.” These bonds include convertible instruments issued by corporate Bitcoin holders such as MicroStrategy.
As institutional demand for digital assets grows, this demand will only increase. It is a sign of Bitcoin’s increasing integration with the mainstream financial markets, analysts said.
