Institutional Adoption of Bitcoin (BTC) Accelerates as ETF Filings Show Investor Appetite
The dominant crypto narrative for 2024 is institutional adoption. From US approval of spot bitcoin (BTC) exchange-traded funds with an increasing number of companies committing to buy the largest cryptocurrency for their treasuries, crypto has entered, more than ever, the main conversation.
Bitcoin has risen nearly 130% this year, breaking record highs on several occasions. It is currently hovering near the psychological threshold of $100,000. ETFs approved in January saw net inflows of $36 billion and accumulated over 1 million BTC.
Additionally, the number of publicly traded companies that say they are adding bitcoin to their corporate treasury is accelerating. The trend, which started with MicroStrategy (MSTR) in 2020, recently acquired KULR Technology (KULR), a maker of energy storage products for the space and defense industry. The Houston, Texas-based company said this bought 217.18 BTC for $21 million and allocates up to 90% of cash surplus to BTC.
Now Bitwise Asset Management, which already has spot bitcoin and ether ETFs, has applied for an exchange-traded fund to track the shares of companies with at least 1,000 BTC in the treasury. Other requirements for the fund, called the Bitwise Bitcoin Standard Corporations ETF, are a market capitalization of at least $100 million, a minimum average daily liquidity of at least $1 million and a public free float of less than 10%, according to a Dec. 26 filing.
The second filing on Thursday was made by Strive Asset Management, founded by Vivek Ramaswamy, a politician in the administration of US President-elect Donald Trump. The Bitcoin Bond ETF seeking exposure through derivative instruments such as MicroStrategy’s convertible securities in an actively managed ETF. The bonds have been a huge success. The 0% coupon bond maturing in 2027 is priced at 150% above par and has outperformed bitcoin since inception.
“Since our inception, Strive has addressed the long-term investment risks posed by the global fiat debt crisis, inflation, and geopolitical tensions,” Strive CEO Matt Cole told CoinDesk. “We strongly believe there is no better long-term investment to hedge these risks than thoughtful exposure to bitcoin.”
“Strive’s first of many planned bitcoin solutions will democratize access to bitcoin bonds, which are bonds issued by corporations to buy bitcoin. We believe these bonds provide attractive that risk-return exposure to bitcoin, but it’s not available for most investors to buy,” he added.
