Strive’s DGCR ETF is chasing yield, not Bitcoin – Here’s why!

The concept of ‘HODL’ is changing a lot. Not only in the crypto space but also on Wall Street. A new joinee in this game is Strive, a known Bitcoin [BTC] treasury company which has come up with a new kind of ETF. 

In partnership with investment advisor and ETF issuer Tuttle Capital Management, Strive has filed for a T-Strive Digital Credit (DGCR) ETF with the U.S Securities and Exchange Commission.

Strive’s T-Strive Digital Credit ETF

Filed on 30 March, the 10th-ranked public Bitcoin treasury company plans to enter the ETFs space by taking a different route.

Instead of directly buying Bitcoin like previous ETFs, the firm 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 pay regular income to investors. 

Besides STRC, the DGCR ETF is also betting 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, with such moves comes a set of given risks. Even if Bitcoin’s price is stable or in the hands of the buyers, it’s not necessary that the ETF will see inflows.

Simply put, the performance of the DGCR ETF is tied closely to the performance of Strategy and Strive’s perpetual stocks. If they fall, so does the ETF. 

This, on the back of Strive’s ASST trading at $9.37 on the charts after a drop of 4.92%.

Price action and more 

At the same time, Strategy’s STRC was trading at $99.97 after a modest hike. Mirroring a similar pattern, SATA too was trading at $99.43 after some gains at press time.

Over the course of the last six months, SATA has been in the green following a hike of over 12%. For its part, STRC saw gains of just 2.99% over the same period. 

All this is happening at a time when the ETF race is already heating up. 

In fact, just recently, Morgan Stanley’s MSBT product made plans to beat leaders like BlackRock’s iShares Bitcoin Trust (IBIT) with a proposed a 0.14% management fee.

Final Summary

• ETF reflects how Wall Street has stopped shying away from crypto and is now going all in with different variables. 
• Not being connected directly to Bitcoin’s price, such ETFs can either be a game-changer or a spoilsport.