Alternative Investments/Digital: An ETP That Combines Gold And Bitcoin Now Trades On A Swiss Exchange

The 21Shares ByteTree Bold Index ETP (BOLD) is trading on the SIX Swiss Exchange.

The new ETP from ByteTree Asset Management and 21Shares is based on the principle that in inflationary times such as these, “BOLD is the 60/40.” That’s because it balances a risk-on asset (bitcoin) with a risk-off asset (gold). The 21Shares ByteTree Bold Index ETP (BOLD) is the first exchange-traded product (ETP) to combine gold and bitcoin in a single fund. (FT)

21Shares ByteTree Bold Index ETP (BOLD)

While backtesting the portfolio, ByteTree found that returns could be improved by as much as 7-8 percentage points by employing an active rebalancing strategy between gold and ETP. The product could therefore perform better than individual gold and bitcoin funds.

“It struck me that bitcoin and gold were always countercyclical. It’s obvious to me that bitcoin has always been correlated to the stock market, or to risk assets in general,” said Charlie Morris, chief investment officer of ByteTree Asset Management, to FT.

Indeed, backtesting showed that over the period 2014-2021, BOLD would have returned 363% versus 134% for the S&P 500 stock index, 82% for US Treasury inflation-protected securities, and 58% for gold. However, bitcoin returned 3,816% in that time.

The fund has had to appoint separate custodians for the two assets. While JPMorgan will custody gold, Copper will be responsible for bitcoin. As a result, costs are higher, and so are annual fees – 1.49%.

“We are making bitcoin an acceptable asset to hold and bringing gold into the 21st century,” explained White.

“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,” said 21Shares co-founder and CEO Hany Rashwan.

Related Story: Bitcoin Could Hit $4.8M, Gold $31K, If Central Banks Diversify Reserves Out of Hard Currencies (VanEck)

Image Credit: Flickr

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