Bitwise Files for ETF Focused on Firms Holding Significant Bitcoin Treasuries

Bitwise, a leading exchange-traded fund (ETF) issuer, has filed to launch a new ETF designed to track publicly traded companies with significant Bitcoin holdings on their balance sheets. The proposed fund, named the Bitwise Bitcoin Standard Corporations ETF, seeks to provide investors exposure to companies that have adopted the "Bitcoin standard" by holding at least 1,000 Bitcoin in their corporate treasuries.

The ETF’s strategy focuses on firms that not only possess significant Bitcoin assets but also meet certain financial criteria. These criteria include a market capitalization of at least $100 million, a minimum average daily liquidity of $1 million, and a public free float of less than 10%. By targeting companies with sizable Bitcoin holdings, Bitwise aims to capture the growing trend of corporations investing in Bitcoin as a treasury asset.

Weighting Strategy Based on Bitcoin Treasuries

Unlike traditional ETFs, which typically allocate holdings based on the market capitalization of the companies in the fund, the Bitwise Bitcoin Standard Corporations ETF will assign weight to its holdings based on the market value of the companies' Bitcoin holdings. However, there will be a cap on the Bitcoin treasury weighting, with each holding limited to a maximum of 25%.

This approach could lead to an intriguing allocation structure. For example, while Tesla—whose market capitalization stands at $1.42 trillion—would typically be one of the largest weights in an ETF based on market cap, it would receive less weight in Bitwise’s ETF compared to MicroStrategy. Despite Tesla’s larger market cap, Tesla holds only 9,720 BTC, whereas MicroStrategy has amassed 444,262 BTC, making it the more significant player in terms of Bitcoin assets.

Growing Trend of Corporate Bitcoin Adoption

The filing comes amid a broader trend of public companies increasingly embracing Bitcoin as part of their corporate treasury strategies. Many companies are buying Bitcoin as a hedge against inflation and as a way to boost their stock prices amid the cryptocurrency’s impressive gains. Bitcoin saw a remarkable 117% increase in value in 2024, briefly crossing the six-figure mark before settling around $95,800.

KULR Technology Group, a notable example, recently purchased $21 million worth of Bitcoin, acquiring 217.18 BTC. Following the purchase, the company’s stock price surged by over 40%, reaching an all-time high of $4.80.

Competition in the Bitcoin ETF Space

Bitwise’s filing also aligns with growing interest in Bitcoin-related ETFs. On the same day as Bitwise’s submission, Strive Asset Management, founded by Vivek Ramaswamy, filed to launch an ETF that would invest in "Bitcoin Bonds"—convertible bonds issued by companies like MicroStrategy, which are tied to Bitcoin holdings. Both filings reflect the increasing demand for investment products that provide exposure to the growing number of publicly traded companies adopting Bitcoin as part of their treasury management.

Conclusion

As more public companies invest in Bitcoin, the demand for financial products that give investors exposure to these Bitcoin-heavy firms is increasing. Bitwise’s proposed ETF aims to capitalize on this trend by offering a unique approach to tracking companies with substantial Bitcoin holdings, providing a new way for investors to gain exposure to Bitcoin’s rising influence in corporate treasuries. If approved, this ETF could open the door for more institutional investors to engage with Bitcoin as part of their broader portfolio strategies.