The Bitwise Bitcoin Standard Corporations ETF (Ticker: OWNB) Launches on NYSE Arca; Tracks Publicly Traded Companies That Own at Least 1,000 BTC

Rhea-AI Summary

Bitwise Asset Management has launched the first-of-its-kind Bitwise Bitcoin Standard Corporations ETF (OWNB) on NYSE Arca. The ETF tracks companies holding at least 1,000 bitcoin in their corporate treasuries through the Bitwise Bitcoin Standard Corporations Index.

The index's top holdings include Strategy (MSTR) at 20.87%, MARA Holdings at 12.12%, and several other companies. The index weights holdings by bitcoin ownership, caps individual holdings at 20%, and rebalances quarterly. Companies with bitcoin holdings less than 33% of current assets receive a 1.5% weighting.

The fund targets corporations viewing bitcoin as a strategic reserve asset amid concerns over government deficits and monetary policy. As of Q3 2024, U.S. nonfinancial corporations held over $4.5 trillion in currency and deposits, and nearly $1 trillion in U.S. Treasuries. The ETF will not invest directly in bitcoin or through derivatives.

Positive

• First-of-its-kind ETF providing exposure to public companies holding significant bitcoin reserves
• Diversified portfolio with maximum 20% cap on individual holdings
• Quarterly rebalancing ensures regular portfolio optimization
• Managed by Bitwise Asset Management with $12 billion in client assets

Negative

• New fund with operating history
• High concentration risk due to focus on bitcoin-holding companies
• Exposure to volatile bitcoin prices may affect company valuations
• Subject to emerging markets risk due to international holdings

Insights

Financial ETF Analyst

Bitwise Asset Management has launched the Bitcoin Standard Corporations ETF (OWNB), the first ETF tracking companies holding at least 1,000 bitcoin in their treasuries. This innovative product addresses a growing trend of corporations adopting bitcoin as a strategic reserve asset alongside traditional treasury holdings.

The fund's methodology is particularly noteworthy - it weights holdings by bitcoin ownership (capped at 20% per holding) and rebalances quarterly. The current portfolio is heavily concentrated in crypto-focused companies, with MicroStrategy (20.87%) and MARA Holdings (12.12%) comprising the top positions, followed by mining companies like CleanSpark and Riot.

This ETF arrives amid significant corporate treasury diversification, with U.S. non-financial corporations holding $4.5+ trillion in currency/deposits and nearly $1 trillion in Treasuries. The product provides investors diversified exposure to the 'corporate bitcoin adoption' thesis without direct cryptocurrency investment.

The timing aligns with growing corporate concerns about inflation and dollar debasement, with Bitwise CIO Matt Hougan noting companies view bitcoin as a "strategic reserve asset that's liquid and scarce." This ETF essentially offers a thematic play on corporate bitcoin adoption that could benefit if more major companies follow this treasury diversification strategy.

Following Strategy’s (MSTR) playbook, 70+ public companies collectively own over $60 billion of bitcoin, including Semler Scientific, MARA Holdings, Tesla, Block, and others.

SAN FRANCISCO--(BUSINESS WIRE)-- Bitwise Asset Management, a leading crypto asset manager with $12 billion in client assets, announced today the launch of the first-of-its-kind Bitwise Bitcoin Standard Corporations ETF (ticker: OWNB).

The ETF seeks to track the Bitwise Bitcoin Standard Corporations Index, a new equity index of companies with at least 1,000 bitcoin in their corporate treasuries. At launch, the top 10 holdings of the index were:

- Strategy (MSTR 20.87%)
- MARA Holdings (MARA 12.12%)
- CleanSpark (CLSK 6.26%)
- Riot Platforms (RIOT 6.23%)
- Boyaa Interactive (434 HK 5.75%)
- Metaplanet (3350 JP 5.25%)
- Aker ASA (AKER NO 4.63%)
- Bitfarms (BITF 4.30%)
- BitFuFu (FUFU 4.03%)
- Galaxy Digital (GLXY CN 3.99%)

Holdings are subject to change without notice.

The index:

• Requires that a company own at least 1,000 bitcoin.
• Weights holdings by the amount of bitcoin owned, subject to certain limits.
• Limits the largest holding to 20% at each rebalance for diversification purposes.
• Automatically assigns a 1.5% weighting to any eligible companies whose bitcoin holdings comprise less than 33% of their current assets.
• Rebalances quarterly.

As of Q3 2024, U.S. nonfinancial corporations held over $4.5 trillion in currency and deposits, and nearly $1 trillion in U.S. Treasuries.¹

“A lot of people wonder: Why do companies buy and hold bitcoin? The answer is simple: For the exact same reasons people do,” said Bitwise CIO Matt Hougan. “Companies are sitting on trillions of dollars in cash, and they look at the U.S. government running a more than $2 trillion annual deficit and think, ‘This isn't going to end well.’ These companies perceive bitcoin as a strategic reserve asset that’s liquid and scarce—and not subject to the whims or money printing of any government. We think companies are only getting started here, and this ETF gives investors exposure to innovative firms at the forefront of this trend.”

The Fund will not invest in bitcoin directly or indirectly through the use of derivatives.

Founded in 2017, Bitwise offers industry-leading education and a broad suite of professional investment products spanning ETFs, private funds, multi-strategy solutions, separately managed account strategies, and staking. The firm has over 100 technology and investment professionals and serves as a partner to thousands of investment professionals and financial institutions looking to understand and gain exposure to bitcoin and other crypto assets.

RISKS AND IMPORTANT INFORMATION

Carefully consider the investment objectives, risk factors, charges, and expenses of the Bitwise Bitcoin Standard Corporations ETF (OWNB) (the “Fund”) before investing. This and additional information can be found in the Fund’s full or summary prospectus, which may be obtained by visiting ownbetf.com/materials. Investors should read it carefully before investing.

Investing involves risk, including the possible loss of principal. There is no guarantee or assurance that the methodology used to create the Index will result in the Fund achieving positive investment returns or outperforming other investment products. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index. Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the fund. Brokerage commissions will reduce returns.

Bitcoin Standard Corporations Risk. Bitcoin Standard Corporations face unique risks as a result of holding bitcoin in their corporate treasury. The speculative perception of bitcoin may overshadow the fundamentals of such companies, leading to exaggerated price movements based on hype or fear. Companies with significant international operations may face challenges if jurisdictions impose restrictions on bitcoin usage, trade or holdings. Companies holding bitcoin may face accounting challenges, such as recording impairment losses when bitcoin prices decline, even if the holdings are not sold. This can distort financial performance metrics.

Bitcoin Risk. While Bitcoin Standard Corporations in many instances may have operations unrelated to their bitcoin holdings, they will nonetheless be subject to the risks of holding bitcoin in their corporate treasury. Bitcoin is a relatively new innovation and the market for bitcoin is subject to rapid price swings, changes and uncertainty. Bitcoin is subject to the risk of fraud, theft, manipulation or security failures, operational or other problems that impact the digital asset trading venues on which bitcoin trades. Bitcoin Standard Corporations may also be negatively impacted by regulatory enforcement actions against the digital asset trading venues upon which bitcoin trades.

Digital Asset Market and Volatility Risk. The price of bitcoin, to which each Bitcoin Standard Corporation has exposure, have historically been highly volatile. The value of such assets has been, and may continue to be, substantially dependent on speculation, such that trading and investing in these assets generally may not be based on fundamental analysis. The value of the Fund’s investments in Bitcoin Standard Corporations – and therefore the value of an investment in the Fund – could decline significantly and without warning. If you are not prepared to accept significant and unexpected changes in the value of the Fund, you should not invest in the Fund.

Asset Class Risk. Securities and other assets in the Index or in the Fund’s portfolio may underperform in comparison to the general financial markets, a particular financial market or other asset classes.

Concentration Risk. The Fund may be susceptible to an increased risk of loss, including losses due to adverse events that affect the Fund’s investments more than the market as a whole, to the extent that the Fund’s investments are concentrated in the securities and/or other assets of a particular issuer or issuers, country, group of countries, region, market, industry, group of industries, sector, market segment or asset class.

Emerging Markets Risk. Investments in securities issued by governments and companies operating in emerging market countries involve additional risks relating to political, economic, or regulatory conditions not associated with investments in securities and instruments issued by U.S. companies or by companies operating in other developed market countries.

New Fund Risk. The Fund is a recently organized investment company with a limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision.

Non-Diversification Risk. As a “non-diversified” fund, the Fund may hold a smaller number of portfolio securities than many other funds. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers. The value of the Fund Shares may be more volatile than the values of shares of more diversified funds.

Non-U.S. Securities Risk. Non-U.S. securities are subject to higher volatility than securities of domestic issuers due to possible adverse political, social or economic developments, restrictions on foreign investment or exchange of securities, capital controls, lack of liquidity, currency exchange rates, excessive taxation, government seizure of assets, the imposition of sanctions by foreign governments, different legal or accounting standards, and less government supervision and regulation of securities exchanges in foreign countries.

Small- and Mid-Capitalization Companies Risk. Small and/or mid capitalization companies may be more vulnerable to adverse general market or economic developments, and their securities may be less liquid and may experience greater price volatility than larger, more established companies as a result of several factors, including limited trading volumes, fewer products or financial resources, management inexperience and less publicly available information. Accordingly, such companies are generally subject to greater market risk than larger, more established companies.

Passive Investment Risk. The fund is passively managed and attempts to mirror the composition and performance of the Bitwise Bitcoin Standard Corporations Index. The Fund generally will not attempt to take defensive positions in declining markets.

OWNB is distributed by Foreside Fund Services, LLC, which is not affiliated with Bitwise or any of its affiliates.

¹ Source: U.S. Federal Reserve: https://www.federalreserve.gov/releases/z1/20241212/html/l102.htm

View source version on businesswire.com: https://www.businesswire.com/news/home/20250311165166/en/

Frank Taylor/Stephanie Dressler

Dukas Linden Public Relations

Bitwise@DLPR.com

Source: Bitwise Asset Management

FAQ

What are the top 3 holdings in the OWNB Bitcoin Standard Corporations ETF?

The top 3 holdings are Strategy (MSTR) at 20.87%, MARA Holdings (MARA) at 12.12%, and CleanSpark (CLSK) at 6.26%.

What are the minimum requirements for a company to be included in OWNB's index?

Companies must own at least 1,000 bitcoin to be included in the index.

How often does the OWNB ETF rebalance its holdings?

The ETF rebalances its holdings quarterly.

What is the maximum weight limit for individual holdings in OWNB?

The largest holding is to 20% at each rebalance for diversification purposes.

Does the OWNB ETF invest directly in bitcoin?

No, the Fund will not invest in bitcoin directly or indirectly through derivatives.