Bitwise, a leading digital asset management firm, has lodged a new registration statement with the US Securities and Exchange Commission (SEC), dated December 26, 2024, seeking approval for the “Bitwise Bitcoin Standard ETF.” The filing describes a fund that 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. “The Adviser believes that investing in equities of companies with substantial BTC-related business or assets can provide exposure to the performance of Bitcoin while mitigating challenges such as custody, regulatory constraints, and liquidity concerns,” the document states. Investing In Bitcoin’s Big Players Central to the proposal is a strict eligibility framework. Only companies that hold at least 1,000 BTC in reserves qualify for inclusion, and they must maintain a market capitalization of no less than $100 million. Daily trading liquidity must exceed $1 million, and the portion of company stock that remains privately held must be under 10%. These criteria are designed to ensure the ETF’s exposure is concentrated in established corporations genuinely committed to Bitcoin in both strategy and treasury. Bitwise underscores that this approach helps protect investors from liquidity risks and potential governance issues. One of the standout features in the filing is Bitwise’s decision to deviate from traditional market-cap weighting. Instead, the Bitcoin Standard ETF applies a weighting approach based on each company’s market value of BTC holdings, subject to a cap of 25% per firm. This mechanism effectively places greater emphasis on the magnitude of a company’s BTC treasury rather than its overall size or revenue: “The Fund’s weighting process will focus on the estimated market value of each company’s Bitcoin reserves, with individual constituents capped to avoid excessive concentration.” For instance, MicroStrategy , a publicly traded business intelligence firm, currently boasts an estimated 444,262 BTC in its reserves. Despite the company’s market capitalization being significantly smaller than that of Tesla, MicroStrategy’s sizeable Bitcoin treasury would assign it a potentially higher weighting than Tesla, which holds approximately 11,509 BTC. The filing also reveals that the fund will invest at least 80% of its net assets in equity securities of what Bitwise dubs Bitcoin Standard companies, while retaining 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 holding significant amounts of BTC, such as MicroStrategy. At press time, BTC traded at $94,857.
