New Proposed ETFs Aim to Integrate Bitcoin Into Traditional Finance

The success of spot price Bitcoin exchange-traded funds in 2024 has helped spawn some new creative spinoffs.

Several new exchange-traded fund (ETF) proposals aim to combine Bitcoin with traditional financial assets, offering a unique way to integrate crypto into mainstream markets.

ProShares has proposed three ETFs that would provide Bitcoin-denominated returns on the S&P 500, Nasdaq-100, or gold prices. These ETFs would essentially take a long position in the respective stock indices or gold and a short position in USD/long BTC using Bitcoin futures.

According to ETF Store president Nate Geraci, these funds can be described as “BTC hedged ETFs,” and they highlight how “Bitcoin is starting to eat traditional finance.”

Another proposed ETF, the REX Bitcoin Corporate Treasury Convertible Bond ETF, would invest in convertible bonds issued by companies like MicroStrategy. These bonds can be swapped for shares of the company's stock if its value rises.

This debt strategy has been successful for MicroStrategy, which has used it to increase its Bitcoin holdings and boost its stock price by about 2,000% since 2020.

Other companies, like MARA Holdings, have also raised funds through convertible bonds to buy Bitcoin. MARA currently holds over 40,000 Bitcoins.

Another ETF proposal from Bitwise would track publicly listed companies holding Bitcoin, such as MicroStrategy, Block, and Tesla, with the aim of targeting companies stacking Bitcoin as a reserve asset.