The concept of ‘HODL’ changes a lot. Not only in the crypto space, but also on Wall Street. A new entrant to this game is Strive, a well-known Bitcoin [BTC] treasury company that has invented a new kind of ETF.
In partnership with investment advisor and ETF issuer Tuttle Capital Management, Strive has filed an application for a T-Strive Digital Credit (DGCR) ETF with the U.S. Securities and Exchange Commission.
Strive’s T-Strive Digital Credit ETF
The 10th-ranked public Bitcoin treasury company, which filed on March 30, plans to enter the ETF space by taking a different route.
Instead of buying Bitcoin directly like previous ETFs, the company plans to invest in companies that hold large amounts of Bitcoin, such as Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock (STRC).
For context, these are types of investments that provide investors with regular income.
In addition to STRC, the DGCR ETF also bets on the Strive, Inc. Variable Rate Series A Perpetual Preferred Stock (SATA). With these moves, Strive plans to move away from the usual ‘HODL’ method.
Upcoming challenges
However, such steps come with some certain risks. Even if the price of Bitcoin is stable or in the hands of the buyers, it is not necessary that the ETF will see inflows.
Simply put, the performance of the DGCR ETF is closely tied to the performance of Strategy and Strive perpetual stocks. If they fall, so will the ETF.
This is thanks to Strive’s ASST charting at $9.37 after falling 4.92%.
Price promotion and more
At the same time, Strategy’s STRC was trading at $99.97, after rising modestly. MDespite a similar pattern, SATA was also trading at $99.43, after making some gains at the time of writing.
In the past six months, SATA has been in the green after an increase of more than 12%. STRC, in turn, posted a gain of just 2.99% over the same period.
All this is happening at a time when the ETF race is already heating up.
Recently, Morgan Stanley’s MSBT product even made plans to take on leaders like BlackRock’s iShares Bitcoin Trust (IBIT) with a proposed management fee of 0.14%.
Final summary
- ETF reflects how Wall Street no longer shuns crypto and is now going all-in on different variables.
- Since they are not directly related to the price of Bitcoin, such ETFs can be a game-changer or a bummer.