On December 26, Strive, an asset management company founded by Vivek Ramaswamy, submitted a filing to United States regulators requesting permission to list an exchange-traded fund (ETF) that invests in convertible bonds issued by MicroStrategy and other corporate Bitcoin buyers.
The Proposed ETF: A New Way to Invest in Bitcoin Bonds
The Strive Bitcoin Bond ETF aims to offer exposure to ‘Bitcoin Bonds,’ which are described as ‘convertible securities issued by MicroStrategy’ or by other companies that plan to invest all or a significant portion of the proceeds to purchase Bitcoin. According to the filing, the ETF will gain exposure to these bonds either directly or through financial derivatives such as swaps and options.
The Rise of Corporate Treasuries
In 2020, MicroStrategy began spending approximately $27 billion buying Bitcoin as part of its corporate treasury strategy, spearheaded by co-founder Michael Saylor. This move has been followed by other companies, with corporate treasuries now holding around $56 billion worth of BTC.
The Potential for ETFs in the US Market
Entities such as Strive are seeking to capitalize on this trend by listing ETFs that provide investors with a way to gain exposure to Bitcoin bonds. However, the regulatory environment in the US remains complex, and many proposed crypto ETFs are still waiting on approval.
The Trump Connection: A Potential Game-Changer
Ramaswamy, an outspoken ally of President-elect Donald Trump, founded Strive in 2022 with the goal of helping investors ‘harness the power of capitalism.’ However, his own politics have been a subject of interest, as he campaigned against Trump in the Republican presidential primary before eventually endorsing him. Ramaswamy’s involvement in the Department of Government Efficiency (DOGE), a private initiative aimed at reducing wasteful government spending, has also garnered attention.
The Impact on Crypto Markets
Industry analysts see Trump’s presidential win as a green light for proposed crypto ETFs waiting on regulatory approval to list in the US. With asset managers submitting a flurry of regulatory filings in 2024, it remains to be seen whether these proposals will come to fruition.
Proposed Crypto ETFs Waiting on Approval
In recent months, several companies have submitted applications to list ETFs holding altcoins such as Solana (SOL), XRP (XRP), and Litecoin (LTC). These proposals follow the trend of corporate treasuries investing in Bitcoin, with many investors seeking ways to gain exposure to these assets.
The Regulatory Environment: A Key Factor
The proposed appointment of pro-crypto industry leadership for key regulatory agencies by President-elect Trump has sparked hope among industry stakeholders. With David Sacks announced as the ‘AI and crypto czar’ and Paul Atkins as the pick for Securities and Exchange Commission chair, some analysts believe that a more favorable regulatory environment may be on the horizon.
The Potential Benefits of ETFs
ETFs offer investors a way to gain exposure to assets such as Bitcoin bonds without having to directly purchase them. This can provide a number of benefits, including:
- Diversification: By investing in an ETF that holds a basket of assets, investors can spread their risk and reduce their exposure to individual stocks or assets.
- Convenience: ETFs are often traded on major exchanges, making it easy for investors to buy and sell them.
- Transparency: The holdings of an ETF are publicly disclosed, allowing investors to see exactly what they own.
The Future of Crypto ETFs in the US Market
As the regulatory environment continues to evolve, it remains to be seen whether proposed crypto ETFs will ultimately gain approval. However, with asset managers submitting a flurry of applications and industry stakeholders holding out hope for a more favorable regulatory climate, it is likely that we will see further developments in this space.
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