MicroStrategy, a publicly-traded company, doubles as the first and only Bitcoin spot exchange-traded fund in the United States, says CEO Michael Saylor. He described MicroStrategy, which is in the business of enterprise software and cloud-based services, as a non-existent spot ETF.
The US Securities and Exchange Commission has so far approved ETFs that tract contracts speculating on the future price of Bitcoin. The regulator has refused to give the go-ahead to any formal applications for a pure-play Bitcoin-based ETF. Experts say Bitcoin-based ETF can give investors the chance to invest in Bitcoin without having to go through the grueling task of signing up for an exchange, opening a crypto wallet or dealing with other logistics for buying and holding the digital asset.
Saylor said that if there was a spot ETF, the investor would be paying a 1% fee and it wouldn’t be leveraged. He highlighted that MicroStrategy converts the cash flow into Bitcoin. The crypto enthusiast said the de facto MicroStrategy Bitcoin spot ETF generates 4% – 5% tax-deferred yield. The company has been adding Bitcoin to its corporate balance sheet for the last two years. It has spent around $4 billion acquiring Bitcoin at an average price of $30,700.
MicroStrategy says the digital asset will only grow its exposure. Saylor explained that as the company generates cash flow, it feels the responsible thing to do for shareholders is to convert the devaluing currency into an asset that is appreciating. If an investor wants 2% exposure to Bitcoin, they need to put 2% of their portfolio into MicroStrategy. They can invest the other 98% of their portfolio in whatever they want.
Other major companies like Tesla, Block, and the insurance company MassMutual have also been pumping hundreds of millions of dollars into Bitcoin.