Michael Saylor built the Bitcoin Empire, and Wall Street sat on the sidelines. He turned his strategy into a corporate Bitcoin vault and stacked billions of dollars of code using convertible bonds, but traditional companies drowned in debt. Now the empire is growing again.
A new Exchange-Traded Fund (ETF) is being launched, focusing on companies with Bitcoin Holdings, giving retailers a direct line to the same convertible bond strategy that made Saylor the world’s largest Bitcoin holder.
The Rex Bitcoin Corporate Treasury Convertible Bond ETF (BMAX) will debut on Friday. The fund holds convertible bonds from companies stacked in Bitcoin, including a strategy that pioneered the idea of issuing equity-related debts to buy crypto. The strategy worked very well and others copied it.
“To date, these bonds have been difficult for individual investors to reach. Greg King, CEO of Rex Financial, said: The ETF also includes Mara Holdings, who adopted the Convert for Bitcoin model after seeing the success of the strategy.
Strategy leads the convertible bond rush
Saylor raises $9 billion from convertible bonds, making it the largest issuer of this type of debt in recent years. Other crypto companies continued to look at the results. In just four months, Mara, Riot and Bitdeer Technologies Group have attracted billions through the same model to capture a larger share of the convertible bond market.
Convertible bonds start as low-interest loans. If the company’s stock price rises, the bonds will be converted into stocks, giving investors a shot with a higher return. Hedge funds bet on volatility and exchange them using arbitrage. However, for regular investors, these bonds have credit risk. If the company cannot fulfill its debt obligations, the bondholder will be a hit.
Despite the risks, institutional investors are piled up. At least five of the seven major convertible bond ETFs, including the $4 billion SPDR Bloomberg Convertible Securities ETF (CWB), hold strategic bonds. The more institutional money flows, the more Bitcoin-backed corporate finance will increase.
Bitcoin investment products continue to expand
The launch of BMAX is part of the growth wave of investment products, mainly Bitcoin. Earlier this week, Bitiwise introduced an index tracking company that holds Bitcoin as a corporate financial asset. The strategy alone accounts for almost 25% of that index, indicating how dominant Saylor’s Bitcoin bets are.
Today, more than 70 public companies own more than $60 billion in Bitcoin, managing a total of $40 billion. The demand for exposure to these companies has led to Levered ETFs such as MSTX and MSTU, offering double the return of their strategy. Together, these funds have drawn in $4 billion since it was launched last year.
Some analysts have warned of the feedback loop of the Bitcoin-backed corporate finance model. When investors buy strategic ETFs, stock prices rise, strategies raise more funds and buy more bitcoin. The cycle repeats and draws more capital into the Bitcoin market.
Wall Street crashes again as economic uncertainty grows under Trump
Bitcoin-based investment tools have gained traction, but traditional markets have fallen into trouble. Stocks fell sharply on Thursday as Trump’s trade war rattled investors. The S&P 500 fell 1.39% to 5,521.52 and was closed in the correction area. The Dow Jones lost 537 points and finished at 40,813.57, with the Nasdaq falling 1.96% and pulling down tech stocks.
Trump escalated tensions by announcing a 200% tariff on European alcohol imports in retaliation against a 50% tariff on EU whiskey. “This is perfect for the US wine and champagne business,” Trump posted to The Society of Truth. The market saw it differently. According to CNBC data, the Russell 2000 index has plummeted 19%, moving closer to the bear market.
“These tariff wars are escalating before they fade,” said Thomas Martin, Portfolio Manager at GlobalT Investments.
Even positive inflation data did not stop selling. The February producer price index (PPI) was inconsistent with forecasts of rising and remained flat. The Consumer Price Index (CPI) also showed weaker inflation than expected. Nevertheless, concerns over Trump’s trade policy overshadowed everything else and kept investors cautious.
Treasury Secretary Scott Becent dismissed the market panic in an interview Thursday with CNBC, saying he “is not worried about a bit of instability over the course of three weeks.” However, both the S&P 500 and Nasdaq have fallen more than 4% in a week, so traders are looking for a safe shelter.
