Bitwise files for ETF tracking companies holding over 1000 Bitcoin in treasury

Bitwise has proposed a new exchange-traded fund that invests in publicly traded companies holding over 1000 BTC in their corporate treasuries.

In a Dec. 26 regulatory filing, Bitwise said the Bitcoin Standard Corporations ETF will invest in equity securities of publicly traded firms that have adopted the “Bitcoin standard” by holding at least 1,000 Bitcoin (BTC) in their corporate treasuries. 

These securities include “common stock, depositary receipts (both American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”), tracking stocks and other equity units. Such securities may be issued by U.S. and non-U.S. companies including companies operating in emerging market countries,” the filing noted.

To qualify for inclusion, companies must have at least $100 million in market capitalization, average daily liquidity of at least $1 million, and a public free float of under 10%. These criteria will be assessed based on quarterly and annual corporate reports.

In terms of weighting, the ETF will prioritize the market value of each company’s Bitcoin holdings rather than its overall market capitalization, which is typically the case with traditional equity ETFs. 

For instance, Marathon Digital Holdings, with over 44,000 BTC in its reserves, will have a higher weighting in the ETF than Tesla, which holds 9,720 BTC, despite its significantly larger $1.42 trillion market capitalization compared to Marathon’s $6.55 billion.

However, no stock will exceed a weighting of 25% in the fund to ensure diversification and prevent overexposure to any single company.

Commenting on the filing, Nate Geraci, President of the ETF Store, said that the ETF could see many companies vying for a spot in the index.

Fuelled by Bitcoin’s performance this year, a wave of Wall Street-focused investment products has emerged, catering to the growing appetite among institutional investors seeking exposure to Bitcoin and other cryptocurrencies through regulated and familiar financial vehicles.

Bitwise, for instance, proposed a Bitcoin-Ethereum mixed crypto ETF to U.S. regulators. According to the Nov. 26 S-1 filing with the Securities and Exchange Commission, the ETF aims to provide balanced exposure between Bitcoin and Ethereum, offering investors a diversified approach to the two largest cryptocurrencies by market cap.

On Dec. 21, New York-based GraniteShares filed for a set of leveraged ETFs aimed at tracking prominent companies with significant crypto exposure, including Riot Platforms, Marathon Digital, MicroStrategy, and Robinhood.

Meanwhile, earlier this month, Grayscale Investments filed to convert its Solana Trust (GSOL) into an exchange-traded fund.