By
Mayowa Adebajo
April 24th, 2024
The ByteTree Asset Management BOLD ETP will continuously track a customized benchmark index comprising Bitcoin and gold.
In what has been described as a monumental development in the history of value storage, the world’s first combined gold and Bitcoin exchange-traded product (ETP) is set to be launched.
This new fund, a first of its kind, can be likened to one where the old meets the new. Gold, the old, is a reputable store of value that has been used by humans for over a millennium. Bitcoin, the new, on the other hand, is a digital currency that has been used over the last decades, earning popular support that made many views it as the ‘digital gold’.
With these combinations, these two stores of values have limitless potential, especially due to their perceived similarities which range from their reputation as an inflationary hedge and finite amount to their low correlation to equities among others.
Named BOLD, a title derived from the combination of Bitcoin and gold, the launch of the new ETP is the product of a partnership between 21Shares and ByteTree Asset Management, a foremost UK-based specialist provider of alternative investment strategies.
The 21Shares ByteTree BOLD ETP (BOLD) is listed on the SIX Swiss Exchange and will track a customized index of bitcoin and gold.
During the launch of the new ETP, Gold, unsurprisingly, weighed higher at about 81.5 percent. Bitcoin, on the other hand, weighed 18/5 percent.
The details regarding the new ETO indicated that the ByteTree Asset Management BOLD ETP will continuously track a customized benchmark index comprising Bitcoin and gold which rebalances on a monthly basis according to the comparative volatility of the two assets.
Based on the outcome of this observation, the pendulum which weighs higher between the two would continue to swing in favor of the side that has been less volatile over the past 360 days.
The reality about this though is that gold would most likely continue to dominate the portfolio, with a weighting of between 70 and 90% in backtesting stretching back to 2016.
“Bond to equity ratio of 60:40 has lost its lustre: BOLD is the new 60:40,” said ByteTree’s Chief Investment Officer, Charlie Morris.
He further noted that Gold’s volatility is now lower than Nasdaq, but the yellow metal has offered better returns than tech stocks, tech stocks are falling because of peak internet. ”
“So, Bitcoin is likely to outperform Nasdaq in both bull and bear markets,” Morris added.