Institutional interest in Bitcoin continues to grow, with multiple filings for Bitcoin-related exchange-traded funds (ETFs) emerging recently, including one targeting MicroStrategy convertible securities.
The prevailing narrative in the cryptocurrency market for 2024 has been institutional adoption. From the U.S. approval of spot Bitcoin (BTC) ETFs to an increasing number of companies integrating Bitcoin into their corporate treasuries, the digital asset has firmly established itself in mainstream financial conversations.
Bitcoin has surged nearly 130% this year, frequently breaking all-time highs and currently trading close to the significant psychological benchmark of $100,000. Spot Bitcoin ETFs, approved in January, have recorded net inflows of $36 billion and collectively hold over 1 million BTC.
The trend of publicly traded companies allocating Bitcoin to their corporate reserves, which began with MicroStrategy (MSTR) in 2020, continues to gain traction. Recently, KULR Technology (KULR), a Texas-based energy storage solutions provider, announced a purchase of 217.18 BTC worth $21 million, with plans to allocate up to 90% of its cash surplus to Bitcoin.
Bitwise Asset Management, already known for its spot Bitcoin and Ether ETFs, has filed for a new ETF named the Bitwise Bitcoin Standard Corporations ETF. This fund will track publicly traded companies holding at least 1,000 BTC in their treasury. Eligibility requirements include a minimum market capitalization of $100 million, daily average liquidity of at least $1 million, and a public free float below 10%, as outlined in the December 26 filing.
In another filing, Strive Asset Management, co-founded by politician Vivek Ramaswamy, announced plans for a Bitcoin Bond ETF. This actively managed fund will gain exposure through derivative instruments, including MicroStrategy’s convertible bonds. These bonds have performed exceptionally well, with the 0% coupon bond maturing in 2027 currently trading at 150% above par and outperforming Bitcoin since their issuance.
“Since our inception, Strive has highlighted the long-term risks posed by the global fiat debt crisis, inflation, and geopolitical instability,” said Strive CEO Matt Cole in a statement to CoinDesk. “We firmly believe that thoughtful exposure to Bitcoin is the most effective long-term hedge against these risks.”
Cole added that Strive’s Bitcoin Bond ETF aims to make Bitcoin bond investments accessible to a broader range of investors. “These bonds, issued by corporations to acquire Bitcoin, offer an attractive risk-return profile but remain largely inaccessible to most investors. Our ETF seeks to bridge that gap,” he concluded.
With institutional interest in Bitcoin accelerating through both direct holdings and innovative financial products, the landscape for Bitcoin adoption appears poised for further expansion in 2024.
