The first exchange-traded product (ETP) that combines Bitcoin (BTC) and gold exposure has been listed on Europe’s 3rd biggest stock exchange – SIX.
The new product has been unveiled by Zug-based ETP issuer 21shares in partnership with investment adviser ByteTree Asset Management.
According to the official post, the physically backed index product, known as 21Shares ByteTree BOLD ETP (ticker BOLD), is designed to track an index comprising Bitcoin and gold, which rebalances monthly as per the comparative volatility of the two assets.
The fund will rebalance on the basis of 360-day historical volatility. The asset with less volatility will achieve higher weightage in a bid to maximize risk-weighted returns.
Due to its lower volatility, gold has been assigned with a higher weighting of 81.5% at launch. Bitcoin, on the other hand, has an 18.5% share. Its objective is to “deliver inflation protection by tracking an index that gives optimal risk-adjusted exposure to bitcoin and gold.” The announcement also read,
“Gold and bitcoin provide diversification to a balanced portfolio. BOLD offers investors a convenient way to invest in gold and bitcoin, in a structure that prudently manages risk. Rebalancing transactions are carried out within a tax-efficient structure.”
Charlie Erith, a chief investment officer of ByteTree Asset Management, said the idea is to make Bitcoin an acceptable asset to hold while bringing gold into the 21st century.
Both assets have attracted significant attention as hedging tools against inflation. Amidst rising structural inflation and heightened geopolitical risk, Erith believes the hybrid product has the potential to act as an important risk and return diversifier in a balanced portfolio.
Following the development, Hany Rashwan, 21Shares co-founder and CEO, commented,
“This hybrid product combines the traditional value of gold with the promising return rates of bitcoin, which is considered by many as the new gold.”
The new ETP is the 30th product by 21Shares. The popular crypto ETP issuer even ventured into the metaverse with 21Shares The Sandbox ETP (SAND) earlier this month. Earlier, it revealed that the ETP is designed to provide investors a secure way to capitalize on the growth of the Ethereum-based decentralized virtual world – The Sandbox.
As reported before, 21Shares teamed up with ETF Securities to roll out the first two ETFs in Australia, tracking the price of Bitcoin and Ethereum. However, the launch has been delayed for now.