By Alicia Maher
An exchange trust fund (ETF) based on combining the two popular stores of value assets, Bitcoin and gold, will make its public debut in Germany and Switzerland with Coinbase and JP Morgan as funds custodians.
According to the reports attributed to the Financial Times, the ByteTree Asset Management firm is on the verge of launching a one-of-its-kind ETF that combines Bitcoin and gold as the two most popular asset reserves.
The new product is called the 21Shares ByteTree BOLD ETP and is set to be listed on the SIX exchange platform in the coming days.
Despite users of the ByteTree being at loggerhead with each other on their choice of the store of value assets, the chief information officer (CIO)of ByteTree is confident that the two will perform well alongside one another if paired as a product.
Meanwhile, the new ETP will initially be listed in Switzerland on the Six exchange platform, and Germany’s launch will be later revealed.
Transforming Bitcoin into a Compatible Gold Alternative
According to Charlie Morris, head of investment at ByteTree, releasing the latest product to the SIX exchange is geared toward making Bitcoin an acceptable asset and bringing gold to the 21st century owing to its historical significance as a hedge against hedge inflation.
Morris is an experienced industry expert, having worked for HSBC as a senior official in charge of marketing and managing a more than $3 billion portfolio.
Both assets are allowed to be invested independently in most cities of Europe due to varying jurisdictions. Still, there is another opinion that the products may need additional time to operate optimally, pending when ByteTree concludes the testing of the ETF.
Coinbase and JP Morgan As Custodians
As a crypto-based investment product, the fees charged constitute 1.49% of the annual ETP fees, which is considered appropriate by the managing partners. Notwithstanding the high fee, this is that selecting a custodian with the resources and will to work with both the physical gold and Bitcoin is difficult to make.
Thus, picking the custodians has contributed to making the transaction fees a bit high for ETP. Hence the managing firm has elected to partner with Coinbase to provide the needed custody services for BTC and JP Morgan to help manage the physical gold for the company.
As noted by Morris, the newly launched product is the first of its kind in history where an ETP has two different independent custodians for their assets.
Skeptics against Supporters
Combining Bitcoin and gold in the same portfolio is likened to the idea shared by Ray Dalio, the founder of Bridgewater Associates.
The billionaire has, in an interview, disclosed that he would rather have a mixture of both gold and Bitcoin in his custody in the event of market instability which has since inspired the ByteTree team to take the initiative and introduce a unique product to the market.