Bitwise Files Bitcoin Standard ETF Proposal With the SEC, Targeting Companies With BTC Treasuries

The fund aims to invest in publicly traded companies that hold significant amounts of BTC on their balance sheets or derive a substantial part of their revenue from BTC-related activities.

Digital asset management firm Bitwise filed a new registration statement with the US Securities and Exchange Commission (SEC) on December 26, 2024. The filing seeks approval for the “Bitwise Bitcoin Standard ETF,” a fund that will invest in publicly traded companies with significant BTC holdings or revenue.

The filing outlines the fund’s investment strategy, which aims to provide investors with exposure to the performance of Bitcoin through equities. According to the document, the fund will invest in a portfolio of common stock that is designed to track the performance of the Bitwise Bitcoin Standard Index.

The index, in turn, will comprise equities of publicly traded companies that have a material portion of their business activities or assets dedicated to Bitcoin. Specifically, the companies will be required to hold a minimum of 1,000 BTC in reserves.

The fund’s exposure will be concentrated in established corporations that are committed to Bitcoin in both strategy and treasury. The rationale behind this approach, as stated by Bitwise, is to mitigate challenges such as custody, regulatory constraints, and liquidity concerns.

Notably, the fund will be weighted by each company’s market value of BTC holdings, subject to a cap of 25% per firm. This mechanism places greater emphasis on the magnitude of a company’s BTC treasury rather than its overall size or revenue.

According to the filing, the fund will invest at least 80% of its net assets in equity securities of Bitcoin Standard companies, as defined by the fund. The fund will retain the flexibility to hold short-term instruments, such as cash, for liquidity purposes.

“Under normal market conditions, the Fund intends to invest at least 80% of its net assets in the equity securities of companies that hold significant BTC on their balance sheets or generate a material portion of their revenues from Bitcoin-related activities,” the filing states.

The reactions from the community were overwhelmingly positive. Nate Geraci, president of The ETF Institute wrote via X: “The btc treasury operations virus is spreading.” James McKay, founder of McKay Research, added: “You know the ‘thing’ is important when exposure to a thing that owns the thing is getting its own wrapper.”

On the same day Bitwise submitted its filing, Vivek Ramaswamy’s Strive Asset Management also made waves with its own Bitcoin-focused ETF proposal. Dubbed the Strive Bitcoin Bond ETF, it would target convertible bonds from companies with significant BTC holdings.

At press time, BTC trades at $94,857.