Bitwise bets big on Bitcoin with ETF focused on BTC-heavy firm

Bitwise hit the market with its proposal for the Bitcoin Standard Corporations ETF. This isn’t like any typical BTC ETF which works with direct exposure. Instead, it targets companies with massive Bitcoin holdings. The fund will invest in firms holding over 1,000 BTC in their treasuries and will prioritize Bitcoin value over market cap.

The ETF proposal comes at the end of a year that Bitcoin soared by 117%, crossing six figures for the first time in November. BTC went on to hit its peak at $108K earlier in December. Public companies have ridden the crypto wave to boost their stock prices, with MicroStrategy making the most of the surge.

Bitwise targets Bitcoin giants

Nate Geraci, President at ETF Store, in a post announced that Bitwise filed for a Bitcoin Standard Corporations ETF. He added that the “BTC treasury operations virus is spreading.”

The firms are expected to hold 1,000 BTC in their treasuries, have at least a $100 million market cap, $1 million daily liquidity, and less than 10% public float.

The weighting formula is unique as it’s based on the market value of a company’s Bitcoin holdings, capped at 25% per firm. Companies like MicroStrategy (444,262 BTC) could dominate the ETF over giants like Tesla (9,720 BTC), despite having smaller market caps.

However, Bitwise isn’t the only innovator. On the same day, Strive (founded by Vivek Ramaswamy) filed for a Bitcoin Bonds ETF. This fund will focus on convertible bonds from Bitcoin-heavy corporates like MicroStrategy.

Public companies are bullish on Bitcoin. They now see BTC as more than just an asset in the market; it has become a strategy. On December 16, KULR Technology Group bought 217 BTC for $21M. This move resulted in a 40% stock price jump, closing at an all-time high of $4.80. 

Bitcoin rally fizzling out

Bitcoin’s rally stalled after a record-breaking year. As 2024 wraps up, Bitcoin price is hovering around the $96,000 –  $97,000 zone. The ongoing rally started after President-elect Trump’s promise of a crypto-friendly US and a national Bitcoin reserve. While the buzz initially drove prices up, traders are now cashing in profits and waiting to see if these plans materialize.

Friday will mark the expiry of a huge amount of BTC and ETH options contracts. More than $14 billion in BTC and $3.8 billion in ETH options are set to expire on Deribit alone. This could mean a choppy market as traders close positions.

It is expected that MicroStrategy might expand its buying spree. The firm already owns over $40 billion in BTC, turning itself into a Bitcoin accumulation machine.

Despite this, Bitcoin could end December in the red and this would be the first monthly loss in four months. After hitting a record $108,316 on December 17, BTC has pulled back as investors weigh risks and take profits.

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