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Bitwise Asset Management has launched a new exchange-traded fund (ETF) that gives investors exposure to publicly held companies that own large stakes of Bitcoin. The Bitwise Bitcoin Holdings Company ETF, traded under the ticker OWNB, consists of 21 corporate stocks weighted according to their reserves of Bitcoin.
This ETF provides an alternative means for investors to get indirect exposure to Bitcoin without actually owning the cryptocurrency. With corporations increasingly adopting Bitcoin into their balance sheets, OWNB may provide a primary investment vehicle for investors who are bullish on Bitcoin’s long-term future.
Understanding the OWNB ETF
OWNB aims to mirror the largest institutional owners of Bitcoin corporations by distributing capital proportionally by the number of BTC they have. The ETF has constituents in a range of sectors, led by Bitcoin mining companies, fintech companies, and large firms that have acquired Bitcoin as a treasury asset.
Largest Holdings in OWNB
The biggest allocations in the ETF are:
MicroStrategy (MSTR) – 20% Allocation
MicroStrategy possesses the biggest corporate Bitcoin reserves among any listed company, with more than 193,000 BTC as of early 2024. CEO Michael Saylor has been a keen supporter of Bitcoin, and it is now the company’s core treasury asset.
Marathon Digital (MARA) – More than 12% Allocation
Marathon Digital is among the largest Bitcoin mining firms, running large-scale mining activities in the United States. The firm continues to build its Bitcoin reserves via mining and strategic buying.
Tesla (TSLA) – 1.27% Allocation
Tesla grabbed the headlines in 2021 by buying $1.5 billion worth of Bitcoin. Although the company subsequently sold some of its holdings, it still keeps some BTC on its balance sheet.
Other Companies in the ETF
The rest of the portfolio consists of Bitcoin mining companies, fintech businesses, and companies with investments in Bitcoin.
Where Is OWNB Traded?
OWNB trades on NYSE Arca, a widely used exchange for ETFs. Trading for OWNB, however, has been somewhat muted following its inception. This could be attributed to investor skepticism or market competition from other Bitcoin-related ETFs, like spot Bitcoin ETFs approved earlier this year.
Why OWNB Matters for Investors
1. Indirect Bitcoin Exposure
OWNB enables exposure to Bitcoin without actually purchasing or holding the cryptocurrency. This may be desirable for investors who desire exposure to Bitcoin but do not wish to contend with wallets, exchanges, and security threats.
2. Diversification in Crypto-Related Stocks
Rather than investing in one Bitcoin-related stock, OWNB offers diversified exposure to several companies with holdings in BTC. This minimizes the risk of individual stocks.
3. Institutional Adoption Potential for Growth
With more corporations embracing Bitcoin as a treasury asset, the ETF value may increase. MicroStrategy and Tesla have already provided a precedent for institutional Bitcoin adoption.
Challenges and Risks
Although OWNB has various advantages, there are risks to take into consideration:
Bitcoin Volatility: The ETF value is directly affected by the price action of Bitcoin, which can be extremely volatile.
Regulatory Uncertainty: Governments across the globe continue to formulate cryptocurrency regulations, which may affect Bitcoin-holding firms.
Market Competition: Other investment products in Bitcoin, including spot Bitcoin ETFs, can attract more investors, reducing demand for OWNB.
Final Thoughts: Is OWNB a Good Investment?
Bitwise’s OWNB ETF is a novel vehicle to invest in companies that specialize in Bitcoin without actually buying BTC. For investors who are confident about the long-term adoption of Bitcoin but don’t want the regulated, stock-market-listed product, OWNB might be a compelling alternative.
That being said, considering its low liquidity and the emergence of spot Bitcoin ETFs, investors need to consider seriously whether OWNB would suit their strategy in their portfolio.
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