As a seasoned crypto investor with a knack for spotting trends and opportunities, I find the recent developments surrounding the proposed Bitwise Bitcoin Standard Corporations ETF quite intriguing. Having witnessed the meteoric rise of Bitcoin this year, it’s clear that more traditional players are beginning to recognize its potential as a valuable asset.
Bitwise, the company behind ETFs, has submitted an application for a fresh fund that will invest in shares of corporations with substantial Bitcoin assets recorded on their balance sheets.
An ETF called “The Bitwise Bitcoin Standard Corporations” will invest in businesses that follow the “Bitcoin Standard” and have stored at least 1,000 Bitcoins (BTC) within their company reserves, as stated in a December 26th regulatory document.
To be considered for the ETF, Bitcoin-holding companies must meet certain requirements: they should have a market capitalization of at least $100 million, ensure an average daily trading volume of at least $1 million, and have a publicly traded share float of less than 10%.
Instead of standard ETFs that allocate weights according to a company’s market capitalization, Bitwise’s unique approach is to base its holdings’ weights on the market value of the firms’ Bitcoin reserves. This allocation strategy has a maximum weight of 25% for any individual holding.
In simpler terms, this means that Tesla, despite having a much larger market capitalization of $1.42 trillion compared to MicroStrategy’s $83.5 billion, would have a smaller influence in Bitwise’s ETF because Tesla only owns 9,720 Bitcoin, while MicroStrategy owns significantly more, with 444,262 Bitcoin.
This development occurs during a surge of public companies purchasing Bitcoin, aiming to elevate their share prices. Notably, Bitcoin has experienced a significant rise of 117% in value this year.
Last month, Bitcoin surpassed the 6-figure mark for the initial time, reaching approximately $108,000 earlier in December. However, its value has decreased since then and is currently trading at about $95,800.
KULR Technology Group, a recently public company, has become the latest to invest in Bitcoin. On December 16th, they disclosed that they had purchased 217.18 Bitcoins for approximately $21 million. This purchase caused their stock price to surge over 40%, reaching an all-time high of $4.80 according to Google Finance on the same day.
Today, Bitwise and Strive Asset Management both submitted filings for Exchange Traded Funds (ETFs). While Bitwise’s ETF aims to provide broad exposure, Strive’s ETF is designed specifically to offer investment in “Bitcoin Bonds.” These bonds are essentially convertible instruments issued by companies like MicroStrategy that hold Bitcoin.
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2024-12-27 06:08