Bitwise launches ETF tracking the stocks of corporate Bitcoin (BTC) holders

Bitwise will expand its portfolio of crypto-based ETFs with an offer based on the corporate stock of Bitcoin (BTC) holders. The fund will track the stock price of a basket of shares based on companies with the biggest BTC treasuries. 

Bitwise has a new ETF offer, this time for a derivative metric for crypto performance. The new fund will track the stocks of companies with corporate treasuries. The minimal treasury is 1,000 Bitcoin (BTC). 

The companies range from pure mining entities with big reserves to those copying the model of Strategy (MicroStrategy) for deliberate BTC purchases. Bitwise gathers those companies under the category of ‘Bitcoin standard’ corporations, picked for their forward-looking choice of treasury assets.

Bitwise already carries eight ETFs based on single coins, baskets, or trends. The newest fund will be known as Bitwise Bitcoin Standard Corporations ETF and will select from the top corporations with BTC treasuries. Bitwise explained its rationale behind the ETF as tapping companies that have broken away from holding corporate bonds as reserves. 

Instead, over 70 public companies have chosen to keep BTC treasuries, for a riskier asset with a much higher upside. The fund does not directly invest in BTC, or trade any BTC derivatives. The fund’s date of inception was on March 10, with no assets under management in the early days. 

The fund trades under the ticker OWNB and is currently valued at $22. For now, the ticker sees minimal activity on the OTC market. The fund is represented on the NYSE Arca exchange. The index will rebalance each quarter, announcing any changes beforehand. 

Bitwise weighs ETF toward Strategy (MSTR)

The new ETF will have a weighted representation of BTC-owning companies. The biggest share belongs to Strategy (formerly MicroStrategy), with 20% of the fund’s weight. 

The ETF will reflect the overall size of BTC treasuries, hence picking Mara Holdings (MARA) with over 12% weight. The rest of the fund is split among miners and other financial or outsider companies. 

Among the notable inclusions are the Japanese company Metaplanet, which has been building up its treasury more aggressively, as well as mining companies CleanSpark and Galaxy Digital. 

Bitwise’s OWNB ETF covers a total of 21 corporate stocks, weighed based on their BTC holdings. Tesla (TSLA) is also included, though with a share of only 1.27%. The fund’s mission was to identify forward-looking companies that saw long-term value in BTC.

Owning BTC does not guarantee a stock’s future performance. Mining stocks remain risky, reflecting the expenses of mining operations. BTC mining pools or farms often sell some of their BTC to cover operating costs. This led to criticism of the new ETF stock selection, as it mixes miners with leveraged BTC buyers. Leveraged buyers can choose their pace of acquisition, while miner treasuries are defined by their ability to produce new coins in competition with other mining farms and pools.

The new ETF announcement arrived at a time when direct BTC inflows to the top funds were down from their peak, taking over $4B off the BTC market. 

Based on Bitwise’s estimation, public companies hold 591,817 BTC. Other estimates are for a total of 3.09B, spread among 164 companies. The Bitwise estimation counts the more sizeable BTC treasuries above 1,000 BTC, and the ETF is a narrower selection of that subset. 

BTC miner stocks have been one of the losers for the past month, reflecting the highly competitive mining conditions. For the past few weeks, even large-scale miners have produced new coins under conditions of distress, where increasing difficulty and falling BTC prices mean some miners have to work at a loss. 

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