REX Shares, a provider of investment products, has announced the launch of a first-of-its-kind exchange-traded fund (ETF) that offers exposure to convertible bonds issued by companies with a Bitcoin strategy.
Greg King, CEO of REX Financial, has noted that it is typically challenging for individual investors to gain exposure to such bonds, but the new ETF is meant to "remove such barriers."
At least 80% of the fund's net assets will be invested into convertible bonds. That said, the product's prospectus clarifies that the policy may be changed without requiring shareholder approval.
It is worth noting that it will primarily consist of Strategy (MSTR) bonds, which account for roughly 75% of all holdings.
On top of that, it will offer exposure to bonds issued by Bitcoin mining giants Marathon Digital (MARA) and Riot Platforms (RIOT). These companies have copied the debt-for-Bitcoin playbook pioneered by Strategy cofounder Michael Saylor.
Yuri MolchanThe ETF is expected to include up to 10 different issuers based on market conditions.
It will not provide direct exposure to Bitcoin, and its performance might not correlate with the price action of the leading cryptocurrency.
According to Bloomberg analyst Athanasios Psarofagis, the fact that a growing ETF ecosystem is emerging around Strategy is a good sign that the company might remain relevant. However, this ecosystem will take a big hit if Strategy suffers a significant correction.
Strategy's shares are up by nearly 6% this Friday. However, they have declined by nearly 18% over the past month.
Dan Burgin
Vladislav Sopov