The first ever exchange-trade product combining Bitcoin and gold has launched in Europe – offering twin prospect of long-term returns and inflation protection which is at least in theory.
The ETP brings together “the best of the old and new worlds of finance” by betting on the portfolio hedging power of gold along with the “strong” returns of the most well-known crypto token, the issuing parties said in a statement.
The physically backed index product is known as 21Shares ByteTree BOLD ETP (ticker BOLD), via Swiss crypto ETP provider 21Shares and U.K. alternative investment provider ByteTree Asset Management, which conceptualized it.
“Gold has historically delivered portfolio protection in inflationary environments, while Bitcoin is the digital equivalent of gold with growing adoption by investors as a distinct asset class and a core store of wealth,” said Charlie Erith, CEO of ByteTree Asset Management, in a statement.
“In a time of rising structural inflation and heightened geopolitical risk, we believe this can act as an important risk and return diversifier in a balanced portfolio.”
“Our team believes that gold and Bitcoin are more aptly described as complimentary assets in a portfolio, rather than the common narrative that one supplements the other or is a substitute for the other,” said Bloomberg Intelligence’s James Seyffart. “Perhaps over time Bitcoin will exhibit characteristics more similar to gold, but right now, Bitcoin is still a risk asset in our view.”
The concept of capitalizing on the two asset – Bitcoin and gold is not first. A small open-ended unit trust called Incrementum Digital & Physical Gold Fund was incorporated in Liechtenstein in 2020 and allocates investments between cryptocurrencies and gold. It has about 20 million euros ($21 million) in assets.
