21Shares Combines Bitcoin and Gold in Latest ETP

21Shares Combines Bitcoin and Gold in Latest ETP

21Shares has continued its product launch spree as this time the company has decided to combine gold and Bitcoin exposures.

The world's largest issuer of cryptocurrency exchange-traded products (ETPs) has partnered with the UK-based company ByteTree asset management to list the 21Shares ByteTree BOLD ETP (BOLD) on the SIX Swiss Exchange.

The fund is intended to provide uncorrelated long-term returns and asset protection in an inflationary environment, 21Shares said in a statement Wednesday. It tracks an index that is rebalanced monthly, with assets weighted in inverse proportion to their risk; Current allocations are 18.5% Bitcoin and 81.5% Gold.

The ETP is the first of its kind and combines the traditional value of gold with the promising returns of Bitcoin - which many consider to be the new gold, according to Hany Rashwan, CEO of 21Shares.

“BOLD seeks to remove the hassle of personally managing the two assets while introducing a disciplined process when it comes to achieving higher risk-adjusted returns,” Rashwan told Blockworks. “We expect both retail and professional investors across Europe to invest in BOLD as it is an easy way to gain exposure to cryptocurrencies.”

The Federal Reserve raised its benchmark interest rate by a quarter of a percentage point last month in response to inflation rising at its fastest pace in four decades. At the time, the central bank signaled seven more interest rate hikes in 2022.

“Gold has historically provided portfolio protection in inflationary environments, while Bitcoin is the digital equivalent of gold and is increasingly being adopted by investors as a standalone asset class and central store of wealth,” Charlie Erith, CEO of ByteTree Asset Management, said in a statement.

“At a time of rising structural inflation and heightened geopolitical risks, we believe this can serve as an important risk and return diversifier in a balanced portfolio.”

The product comes to market after other issuers attempted to combine exposure to these assets in the same strategy.

WisdomTree began allowing its Enhanced Commodity Strategy Fund (GCC) to invest up to 5% of its net assets in Bitcoin futures contracts last year. The fund also invests in futures contracts for more than a dozen commodities, including gold.

Amplify ETFs launched its Inflation Fighter ETF (IWIN) in February, which provides exposure to a range of stocks, REITs, currencies and commodities, including gold and Bitcoin.

VanEck fund group Submitted in December for an ETF that invests in gold and Bitcoin futures contracts, gold-linked instruments and exchange-traded products that provide exposure to gold or Bitcoin.

Nate Geraci, president of The ETF Store, asked at the time who VanEck was marketing to, noting that "gold bugs and the Bitcoin maxis tend to be at each other's throats."

HIVE Blockchain Technologies Executive Chairman Frank Holmes said during a panel at the Exchange ETF conference earlier this month that gold “will always be there.” However, he noted that millennials and certain “sophisticated” older investors are switching from gold to Bitcoin.

MicroStrategy CEO Michael Saylor agreed that gold will continue to be a non-sovereign store of value for certain investors, but added that 21st century ideas like Bitcoin have the power to “turn the world upside down.”

21Shares manages around $2.5 billion in assets. Its products are listed on 10 regulated European stock exchanges. The company has launched a handful of ETPs this year, including products with Aave (AAVE), Chainlink (LINK), and Uniswap (UNI) as their underlying assets. 21Shares expects to launch the first Australian ETFs investing directly in Bitcoin and Ether this week.

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The post 21Shares Combines Bitcoin and Gold in Newest ETP is not financial advice.