Strive Asset Management, co-founded by Vivek Ramaswamy, has taken a significant step by submitting a proposal to U.S. regulators for a new exchange-traded fund (ETF) targeting “Bitcoin Bonds,” as revealed in a filing dated December 26.
The proposed Strive Bitcoin Bond ETF aims to invest in convertible bonds from firms like MicroStrategy that have committed substantial capital to Bitcoin (BTC). These corporations use the proceeds from such bonds to enhance their Bitcoin holdings.
Understanding the Bitcoin Bond ETF
This actively managed fund will achieve exposure to Bitcoin Bonds directly or through various financial instruments such as swaps and options. While the management fee remains undisclosed, it is worth noting that actively managed funds generally incur higher fees compared to their passively managed counterparts.
MicroStrategy, under the leadership of co-founder Michael Saylor, began acquiring Bitcoin in 2020 as part of a strategic treasury initiative. This bold venture has cost the company approximately $27 billion, propelling its stock, MSTR, by over 2,200%, and surpassing the performance of numerous major public companies, including Nvidia.
The company has financed its Bitcoin purchases by utilizing a combination of new equity issuance and convertible bonds, which usually feature low or no interest rates but can be converted into shares under certain conditions. Other companies have adopted similar approaches, leading corporate treasuries to collectively hold an estimated $56 billion in Bitcoin, according to BitcoinTreasuries.net.
A Supportive Landscape for Crypto
Ramaswamy, a prominent supporter of President-elect Donald Trump, established Strive in 2022 with the vision of enabling investors to harness the power of capitalism. Though initially running in the Republican presidential primaries, Ramaswamy later endorsed Trump.
The mission of Strive is to offer innovative financial products that empower investors, aligning with Ramaswamy’s aspirations of upending traditional industries. The filing of the Strive Bitcoin Bond ETF is timely, as industry observers forecast a Trump administration could foster a more favorable regulatory climate for cryptocurrency.
Following Trump’s election victory in November, the U.S. crypto industry anticipates significant regulatory shifts, including the appointment of individuals like former PayPal COO David Sacks as the “AI and crypto czar.”
This filing reflects a broader trend in the industry, as various asset managers are seeking approval for a range of crypto-focused ETFs, including those aimed at altcoins such as Solana, XRP, and Litecoin. These initiatives underscore the increasing interest in cryptocurrency-based investment vehicles amid evolving regulatory landscapes.
