21Shares Launches World’s First Bitcoin and Gold Tracking ETP in Europe

Key Insights:

• 21Shares, in partnership with ByteTree Asset Management, launched the ETP.
• A combination of Bitcoin and Gold will back the ETP.
• Bitcoin has been struggling to stay above $40k for weeks now.

Conceptualized by the UK-based alternative investment provider ByteTree Asset Management and backed by Swiss crypto ETP provider 21Shares, the 21Shares ByteTree BOLD ETP (BOLD) is the first ETP to combine the values of Gold and Bitcoin to create an ingenious investment product.

A BOLD Step

The purpose behind combining two of the biggest investment assets in the world was to not only offer the secure long-term returns that Gold does but also to protect the investors from inflation with Bitcoin. 

The volatility that comes with Bitcoin is well known, and to avoid that, the ETP’s weightage has been divided in favor of Gold over Bitcoin.

Being lesser volatile, Gold has been given an 81.5% weightage in the ETP, with Bitcoin receiving an 18.5% weightage.

Although the ETP will be rebalanced each month in inverse proportion to their risk and each of the assets will be given exposure in order to manage volatility and boost returns. 

Commenting on the same CEO of ByteTree Asset Management, Charlie Erith said,

“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. 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.”

Gold’s influence in the crypto space has been increasing of late as investors are trying to find ways to reduce the volatility of the crypto market and, at the same time, provide the benefits that come with the crypto space.

In an effort to execute the same, the Japanese trading company Mitsui & Co. also developed a new form of stablecoin.

As reported by FXEmpire, the firm launched a Gold pegged cryptocurrency known as ZipangCoin (ZPG) in February.

While this asset shares similarities to a stablecoin, it is not pegged 1:1 with JPY or USD, but instead, it is pegged 1:1 with 1 gram of Gold. 

Thus, it is clear that there is a demand for Gold-linked products in the market, it’s just about how it can be executed.

Bitcoin Loses $40K Again

It makes sense for BOLD to give lesser weightage to Bitcoin since an example of its volatility is visible on the charts currently.

Over the last two weeks, BTC has struggled to maintain a stable movement above $40k, and yesterday, after falling by 5.7%, it lost the level as support again.

Although the king coin is slowly gaining the support back, it is yet to be seen if it can manage to close above it.