Investor Demand for Bitcoin Grows as Institutional ETF Filings Multiply

Institutional adoption of Bitcoin is gaining momentum, with fresh filings for Bitcoin-focused exchange-traded funds (ETFs) highlighting the rising interest, including one specifically targeting MicroStrategy’s convertible securities.

In 2024, institutional participation has emerged as the defining theme in the cryptocurrency market. From the approval of spot Bitcoin (BTC) ETFs in the U.S. to an increasing number of corporations incorporating Bitcoin into their treasuries, Bitcoin is solidifying its role as a critical asset in mainstream finance.

Bitcoin has seen a remarkable rise of nearly 130% this year, consistently setting new all-time highs and currently trading near the psychologically significant $100,000 mark. Spot Bitcoin ETFs, approved earlier this year, have recorded net inflows surpassing $36 billion and collectively hold over 1 million BTC.

The trend of publicly traded companies adding Bitcoin to their reserves, first pioneered by MicroStrategy (MSTR) in 2020, continues to grow. Recently, KULR Technology (KULR), a Houston-based energy storage solutions firm, acquired 217.18 BTC valued at $21 million, with plans to allocate up to 90% of its excess cash reserves to Bitcoin.

Bitwise Asset Management, already established with spot Bitcoin and Ether ETFs, has proposed the Bitwise Bitcoin Standard Corporations ETF. This fund will focus on publicly traded companies holding at least 1,000 BTC in their reserves. Eligibility criteria include a market capitalization of at least $100 million, a minimum daily average liquidity of $1 million, and a public free float below 10%, according to the December 26 filing.

Strive Asset Management, co-founded by political figure Vivek Ramaswamy, has introduced its Bitcoin Bond ETF. This actively managed fund will provide exposure to Bitcoin through derivative instruments, including MicroStrategy’s convertible bonds. These bonds have shown impressive performance, with the 0% coupon bond maturing in 2027 currently trading at 150% above par and outperforming Bitcoin since issuance.

“Strive has consistently highlighted the long-term risks posed by fiat currency instability, inflation, and geopolitical uncertainty,” said Strive CEO Matt Cole in a statement to CoinDesk. “We believe Bitcoin offers one of the most effective hedges against these systemic risks.”

Cole emphasized that Strive’s Bitcoin Bond ETF aims to provide broader access to Bitcoin-backed bonds. “These corporate bonds, designed to purchase Bitcoin, offer a unique risk-reward profile but are often unavailable to most investors. Our ETF seeks to change that and make them more accessible,” he added.

With institutional interest in Bitcoin continuing to surge, both direct holdings and innovative financial products are positioning Bitcoin for deeper integration into global financial systems in 2024.