Strive’s exchange-traded fund (ETF) provides exposure to Bitcoin through “Bitcoin Bonds,” which are predominantly convertible securities and derivatives from MicroStrategy.
Strive Asset Management is introducing a new exchange-traded fund (ETF) that will offer exposure to Bitcoin through convertible securities. The fund will predominantly concentrate on MicroStrategy’s holdings.
The Strive Bitcoin Bond ETF will allocate a minimum of 80% of its assets to “Bitcoin Bonds” and related derivative instruments, such as swaps and options.
The actively managed fund will maintain both direct positions in Bitcoin-linked convertible securities and derivatives, with allocation decisions made based on the potential for return and cost.
The fund may invest in other Bitcoin-focused investment vehicles and will maintain liquid positions in short-term US Treasury securities.
As a non-diversified fund, it has the ability to allocate over 25% of its assets to software and technology sector companies and concentrate holdings in single issuers such as MicroStrategy.
Empowered Funds, LLC will operate the ETF under a “manager of managers” structure, allowing it to appoint and replace sub-advisers without shareholder sanction.
The Depository Trust Company will hold the fund’s shares, which will be traded on the New York Stock Exchange.
The ETF intends to become a regulated investment corporation and distribute net investment income quarterly, as well as capital gains at least annually.
The fund has the option to invest up to 15% in illiquid securities and engage in securities lending up to 33 1/3% of its total assets.
The performance of the fund will be closely associated with MicroStrategy’s Bitcoin investment outcomes. Since 2020, MicroStrategy has implemented a Bitcoin treasury strategy, and numerous other organisations have recently followed suit.
The ETF endeavours to leverage MicroStrategy’s investments by employing its derivatives positions as innovative financial instruments, thereby emphasising the increasing interest among investors in using MicroStrategy as a proxy for Bitcoin exposure.
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