Summary Bitwise's OWNB ETF offers a middle ground for investors seeking amplified Bitcoin exposure with lower leverage risk through a diversified portfolio of Bitcoin-exposed equities. OWNB includes Bitcoin treasury companies and miners, providing indirect leveraged exposure to Bitcoin while mitigating concentration risk through quarterly rebalancing and a 20% cap on largest holdings. The ETF aims to balance higher beta to Bitcoin with reduced volatility compared to fully leveraged ETFs, appealing to moderately risk-tolerant investors. Increased corporate adoption of Bitcoin as a reserve asset could drive potential upside for OWNB, benefiting from the growing trend of Bitcoin treasury strategies. Bitcoin ( BTC-USD ) continues to prove to be an in-demand asset, with investment vehicles being built around it. The spot Bitcoin ETFs launched early last year were a success. By the numbers, iShares Bitcoin Trust ( IBIT ) was among the top three ETFs with the highest inflow in 2024. IBIT recorded $37 billion in inflows last year. Bitwise Bitcoin Standard Corporations ETF (Bitwise) As more publicly traded companies continue to adopt Bitcoin treasury strategy, Bitwise, the fund manager of the Bitwise Bitcoin ETF ( BITB ), has launched another Bitcoin ETF . This new ETF tracks publicly traded companies holding at least 1,000 Bitcoin in their corporate treasuries. OWNB top 10 holdings (Bitwise) The Bitwise Bitcoin Standard Corporations ETF (OWNB) is another avenue to Bitcoin exposure for investors interested in amplified BTC exposure. This ETF invests in publicly traded companies with significant Bitcoin exposure, giving investors an indirect leveraged exposure to Bitcoin-heavy companies. OWNB holds Bitcoin treasury companies like Strategy ( MSTR ) and Metaplanet ( OTC:MTPLF ). The ETF also includes top Bitcoin miners like MARA Holdings ( MARA ), Riot Platforms ( RIOT ), and CleanSpark ( CLSK ). The ETF automatically assigns a 1.5% weighting to any eligible companies whose bitcoin holdings comprise less than 33% of their current assets, and caps the largest holding to 20% of the fund’s total assets. Why I Might Consider OWNB for Amplified Bitcoin Exposure Every investor has a varying risk appetite. Some investors are willing to take on the risk of higher-beta exposure to an inherently risky asset like Bitcoin. We have seen increased activity in Bitcoin options trades, while on the other side of the divide, the less risky spot ETFs have also been popular. The Block Bitwise’s OWNB strikes me as the ETF that sits in the middle ground between direct 1:1 exposure to BTC (through the spot ETFs) and high risk leverage exposure through Bitcoin options or leveraged ETFs like the 2X Bitcoin Strategy ETF ( BITX ). I think OWNB will appeal to the segment of the market that is moderately risk tolerant. OWNB isn't directly leveraged; however, some of its holdings have leveraged exposure to BTC. As of the initial rebalance at the ETF launch, MSTR and MTPLF are such leveraged BTC bets in the top ten holdings of OWNB alongside stocks like RIOT and CLSK, which have operational but not financial leverage to Bitcoin exposure. What this means for the investor is that OWNB can offer higher beta to BTC than a spot ETF, while avoiding the higher volatility and risks of fully leveraged Bitcoin ETFs like BITX. The OWNB risk is adjusted because the fund holds not just equity of Bitcoin treasury companies, but also those of Bitcoin miners. I believe OWNB will also be less sensitive to short-term price swings compared to fully leveraged ETFs that use derivatives and typically rebalance daily. OWNB rebalances quarterly, and this gives investors potentially more stable performance. On each quarterly rebalance, OWNB limits the largest holding in the ETF to 20% as a way to mitigate concentration risk. This way, no single holding dominates the ETF and the ETF continually maintains its diversified portfolio. And the ETF’s diversification is kept well-rounded with the mix of both Bitcoin treasury companies and Bitcoin miners, providing a sort of “hybrid” exposure to the different ways businesses gain Bitcoin exposure and generate value from it. The inclusion of Bitcoin miners potentially dilutes the leverage effect and risk of OWNB compared to if the fund holds and tracks Bitcoin treasury companies solely whose balance sheets are more directly leveraged to Bitcoin. Miners’ exposure to Bitcoin is more operational rather than financially leveraged. Miners do not typically need to issue debt to gain Bitcoin. Their inclusion in the ETF tempers the leverage risk of OWNB, but also reduces the potential upside during Bitcoin bull markets. It's a trade-off between higher upside potential and reduced leverage risk. Overall, the choice of gaining 1:1 exposure through spot ETFs, direct leveraged exposure through leveraged ETFs, or playing in the middle ground by gaining indirect leveraged exposure to Bitcoin through OWNB lies on the risk appetite of the investor and the short- or long-term investment goals of the investor. Risk While I've mentioned that the OWNB ETF offers indirectly leveraged exposure to Bitcoin through Bitcoin-exposed equities, and is potentially less risky than fully leveraged ETFs like BITX due to its diversified portfolio of equities and quarterly rebalancing, it is worth mentioning that as a Bitcoin exposed ETF, OWNB is still highly influenced by the price movements of Bitcoin as all its underlying equities are Bitcoin-exposed. The indirect exposure doesn't eliminate Bitcoin's inherent volatility risk for investors. Takeaway Bitwise OWNB is a novel and interesting ETF concept that will appeal to investors seeking a middle ground between amplified Bitcoin exposure and lower leverage risk. Bitcoin and Bitcoin-exposed stocks have seen volatility and downside recently; however. Bitcoin’s recognition as a reserve asset has increased lately. Now that the Bitcoin reserve strategy has been announced by President Trump's administration, I believe that there is growing incentive among corporations to adopt Bitcoin treasury strategy. More adoption means more potential upside for Bitcoin. And an ETF like OWNB that tracks corporate adoption will mostly benefit from this trend.
