Bitcoin Institutional Adoption Grows with New ETF Applications and Corporate Purchases
The dominant crypto narrative for 2024 centers on institutional adoption. The U.S. approval of spot bitcoin (BTC) exchange-traded funds (ETFs) and the increasing number of companies acquiring bitcoin for their treasuries signal a shift into mainstream discourse.
Bitcoin's value has risen nearly 130% this year, reaching record highs and approaching the significant threshold of $100,000. ETFs approved in January have attracted net inflows of $36 billion, accumulating over 1 million BTC.
The trend of publicly traded companies adding bitcoin to their corporate treasury is gaining momentum. This began with MicroStrategy (MSTR) in 2020 and recently includes KULR Technology (KULR), which purchased 217.18 BTC for $21 million and plans to allocate up to 90% of surplus cash to BTC.
Bitwise Asset Management has applied for an ETF to track companies holding at least 1,000 BTC in treasury. The Bitwise Bitcoin Standard Corporations ETF requires a market capitalization of at least $100 million, minimum average daily liquidity of $1 million, and a public free float of less than 10%, according to the December 26 filing.
Strive Asset Management also filed for a Bitcoin Bond ETF, co-founded by Vivek Ramaswamy. This fund aims to gain exposure through derivative instruments like MicroStrategy's convertible securities. The bonds are highly successful, with a 0% coupon bond maturing in 2027 priced at 150% above par and outperforming bitcoin since inception.
Strive CEO Matt Cole stated that the company highlights long-term investment risks from the global fiat debt crisis, inflation, and geopolitical tensions. He emphasized that thoughtful exposure to bitcoin serves as a strong hedge against these risks.
Cole noted that Strive's initial bitcoin solutions aim to democratize access to bitcoin bonds, which corporations issue to purchase bitcoin. These bonds offer attractive risk-return profiles but are often unavailable to most investors.