US will launch ETFs based on securities of companies investing in BTC

What’s new? Vivek Ramaswamy’s asset management company Strive has filed with the US Securities and Exchange Commission (SEC) to launch the Strive Bitcoin Bond ETF, which will offer investors access to bitcoin bonds both directly and through swaps and options. The fund will invest in convertible securities of companies that are issued for the purpose of buying bitcoins.

SEC filing

What else is known? The basket of the new fund will include, among other things, securities of Michael Saylor’s MicroStrategy, an analytics software company. It began investing in bitcoin in late 2020 and has since become the largest holder of the asset on its own balance sheet among public companies (439 000 BTC worth over $42 billion). Its MSTR stock has grown in value by 2250% in that time, outperforming virtually every major public company except Nvidia.

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The company has spent about $27 billion on bitcoin purchases over the entire time, and it has financed these investments by issuing new shares and convertible bonds. The company’s bonds offer low or no interest, but they can be converted into MSTR stock under certain conditions.

Other companies have started to follow MicroStrategy’s example, including the largest miners Hut 8, Riot, and Marathon, which earlier this month conducted securities offerings for amounts ranging from $500 million to $1,1 billion. Japanese company Metaplanet also implemented a bitcoin strategy, after which it posted the fastest stock gains in the local market.

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Strive has not yet specified what management fees will be charged to investors, but actively managed funds, which includes the Strive Bitcoin Bond ETF, typically charge more than passive index funds.

The company was founded in 2022 by Vivek Ramaswamy, who made most of his $1 billion fortune from biotech startup Roivant Sciences. In 2023, he competed with Donald Trump for the Republican Party’s presidential nomination but endorsed the latter’s candidacy after the latter won.

In November, Ramaswamy joined the Department of Government Efficiency (DOGE), a private initiative to reduce government spending, where Elon Musk, among others, is involved.

After his victory, Trump proposed appointing cryptocurrency-friendly candidates to head key regulators. So the market expects more spot ETFs based on major altcoins such as SOL and XRP, in addition to existing BTC and ETH funds, to hit the market after the inauguration on January 20.