Strive files for “Bitcoin Bond” ETF tied to MicroStrategy holdings

Strive Asset Management is launching a new ETF that will provide exposure to Bitcoin through convertible securities, primarily focusing on MicroStrategy’s holdings.

The Strive Bitcoin Bond ETF will invest at least 80% of its assets in “Bitcoin Bonds” and related derivative instruments, including swaps and options.

The actively managed fund will hold both direct positions in Bitcoin-linked convertible securities and derivatives, with allocation decisions based on cost and return potential.

The fund will maintain cash positions in short-term US Treasury securities and may invest in other Bitcoin-focused investment vehicles.

As a non-diversified fund, it can concentrate holdings in single issuers like MicroStrategy and allocate more than 25% of assets to software and technology sector companies.

Operating under a “manager of managers” structure, the ETF will be advised by Empowered Funds, LLC, which can appoint and replace sub-advisers without shareholder approval.

The fund’s shares will trade on the New York Stock Exchange and be held through the Depository Trust Company.

The ETF aims to qualify as a regulated investment company and plans to distribute net investment income quarterly and capital gains at least annually.

The fund may engage in securities lending up to 33 1/3% of total assets and can invest up to 15% in illiquid securities.

The fund’s performance will be closely tied to MicroStrategy’s Bitcoin investment outcomes.

MicroStrategy has been adopting a Bitcoin treasury strategy since 2020, with many other companies following suit recently.

The ETF aims to capitalize on MicroStrategy’s investments by utilizing its derivatives positions as novel financial instruments, highlighting investors’ growing appetite to use MicroStrategy as a proxy for Bitcoin exposure.

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