• In Europe, the first ever exchange-traded product that combines gold and silver is released.
• It aims to offer the best of the two worlds of finance.
• ETFs balance both exposures monthly in an inverse proportion to their risk to manage volatility.

Europe’s first exchange-traded commodity combining Bitcoin with gold was officially launched. They offer inflation protection and long-term reward, at the very least.

21Shares ByteTree ETP BOLD (BOLD) is the physical-backed index product. This was the idea of 21Shares, a Swiss ETP provider that uses crypto ETPs (BOLD), and ByteTree Asset Management in the UK.

It combines the best of old and modern finance to create a novel ETP. This was possible by betting on both the high returns of Bitcoin and gold’s portfolio hedge power.

Gold is less volatile than Bitcoin and had a lower weight at launch of 81.5%, while Bitcoin has 18.5%. Each month, both the exposures and their risk are rebalanced by ETP to reduce volatility and maximize returns.

Charlie Erith is the CEO of ByteTree Asset Management.

Gold historically has provided protection to portfolios in inflationary situations. Bitcoin on the other hand is being adopted more and more by investors. This can be an effective risk- and return diversifier for a balanced portfolio in times of increasing structural inflation and increased geopolitical risks.

Many market participants are still skeptical of Bitcoin’s suitability as a potential barrier to inflation, specifically in light of the cryptocurrency’s negatively trending correlation with gold.

With the US launch of the first Bitcoin linked ETF, excitement over ETPs with Bitcoin links soared to the final quarter of 2021. ProShares Bitcoin Strategy ETF, (BITO), was the most traded ETF at that point. Since then the US SEC repeatedly rejected the idea for a physical-backed Bitcoin ETF.

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