- The 21Shares ByteTree BOLD ETP is listed on the SIX Swiss Exchange and offered by 21Shares and ByteTree
- A physically backed ETP which rebalances Bitcoin and Gold monthly in inverse proportion to their risk
- BOLD is designed as a core component within a balanced portfolio, aiming to deliver uncorrelated long-term returns and wealth protection in an inflationary environment
Zug, Switzerland, 27 April 2022 – 21Shares AG (“21Shares”), a Swiss-based issuer of crypto Exchange Traded Products (ETPs), today announces the listing of the 21Shares ByteTree BOLD ETP on the SIX Swiss Exchange, the world’s first ETP that combines Bitcoin and Gold.
The ByteTree BOLD index product has been developed in partnership with ByteTree Asset Management, a UK specialist provider and manager of alternative investment stategies . BOLD’s core investment objective is to deliver protection against inflation via optimized risk adjusted exposure to Bitcoin and Gold with assets weighted in inverse proportion to their risk. It is designed to be a new diversifier within a balanced portfolio, offering a low correlation to traditional asset classes.
It will track a new customised benchmark/ index comprising Bitcoin and Gold via monthly rebalancing.. The weighting at launch is 18.5% Bitcoin and 81.5% Gold. BOLD aims to deliver protection against inflation, giving optimal risk-adjusted exposure to Bitcoin and Gold. It seeks to track an index comprising Bitcoin and Gold, which rebalances monthly according to the inverse historic volatility (360-day) of each asset. The less volatile asset will be accorded the higher weighting. By automatically adjusting weightings the rebalancing aims to smooth and enhance combined returns over time – the strategy continually favours the less risky asset, as measured by historic volatility. Gold has historically performed well in “risk-off” economic environments, while Bitcoin has performed well in “risk-on” economic environments.
Combination of two inflation-resistant assets
The 21Shares ByteTree BOLD ETP combines the best of the old and new worlds of finance. As the oldest asset class, Gold has historically delivered portfolio protection in inflationary environments. Bitcoin is the digital equivalent of Gold, with a growing adoption as a store of wealth. Both are liquid “hard assets” deemed resistant to inflation, and have delivered strong returns since 2015.
Commenting on the joint product launch, Hany Rashwan, CEO and co-founder of 21Shares, said: “At 21Shares, we are excited to introduce the public to the world’s first Bitcoin and Gold ETP. This hybrid product combines the traditional value of Gold with the promising return rates of Bitcoin, which is considered by many as the new Gold. With BOLD, we enter completely new territory and once again demonstrate the pioneering spirit of 21Shares within the ever-evolving crypto space.”
Commenting on the launch, Charlie Erith, CEO of ByteTree Asset Management, said: “The BOLD investment strategy is a unique approach to blending a high return digital asset with a traditional store of value, with a low correlation to equities and bonds. 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.”
Commenting on the investment approach, Charlie Morris, CIO of ByteTree Asset Management, said: “Our core investment objective is to improve portfolio returns and reduce an investor’s portfolio risk. By holding both assets in an ETP and rebalancing Bitcoinand Gold exposure monthly, we are targeting superior risk-adjusted returns compared to both assets held separately. Inverse volatility aims to balance an appropriate allocation when blending high and low volatility assets particularly in fluctuating markets.”
Key Features and Fund details
- Investment objective:
- Replication style – physically backed Bitcoin and Gold
- Benchmark – Vinter ByteTree BOLD 1 Index (index provider for Crypto assets)
- Review – BOLD is rebalanced on the first day of each month
- Listing: SIX Swiss Exchange, ISIN: CH1146882308, Ticker: BOLD SW, Trading currency: USD
Key Features:
- Portfolio allocation – The weighting at launch is 18.5% bitcoin and 81.5% Gold. Liquidity – Gold is one of the most liquid assets in the world, trading around $167bn per day and Bitcoin around $6bn a day *
- Volatility – Bitcoin and Gold have different levels of volatility – gold volatility has approximately that of the US 20-year Treasury Inflation protected securities * and Bitcoin’s volatility is around 62% **
- Risk – BOLD is expected to have a slightly higher risk profile than gold, and materially lower risk than Bitcoin, as measured by volatility. In 2022, BOLD volatility has fallen below that of gold, although this will not always be the case.
- Sponsor – 21Shares (specialist crypto ETP provider based in Switzerland)
- Custody – JP Morgan (Gold) and Copper (Bitcoin)
- Investment Adviser – ByteTree Asset Management
*Sources for liquidity: Gold: World Gold Council (https://www.gold.org/about-gold/market-structure-and-flows ); Bitcoin: ByteTree.com (measuring on-chain transactions only)
** Source for volatility: Bloomberg
Historic performance of Vinter ByteTree BOLD 1 Index – 2014-2022 (31st March 2022):
The ByeTree Bold Index tracks the performance of a portfolio that contains Bitcoin and Gold. Bold is designed to be a conservative way to blend these two assets and asset allocation is determined by 360-day volatility.
- Over 1 year, BOLD has produced a Sharpe ratio of 0.7, annualized volatility of 17% and a return of 11%, compared to the S&P 500 of 1.0, volatility of 13% and a return of 14%. Over the same timeframe, Bitcoin has produced a Sharpe ratio of -0.3, volatility of 73% and a reurn of -22%, while Gold has a Sharpe ratio of 1.0, volatility of 14% and a return of 13%
- Over 3 years BOLD has produced a Sharpe ratio of 1.8, annualised volatility of 18%, and a return of 33%, compared to the S&P 500 of 0.9%, volatility of 18% and a return of 17%. Over the same timeframe Bitcoin has produced a Sharpe ratio of 1.5, annualized volatility of 81% and a return of 124%, while Gold has a Sharpe ratio of 1.0, annualized volatility of 15% and a return of 14%.
- Over 5 years BOLD has produced a Sharpe ratio of 1.6 and annualised volatility of 19% and a return of 30%, compared to the S&P 500 of 0.9 and and volatility of 16% a return of 14%. For Bitcoin it’s produced a Sharpe ratio of 1.2 and annualized volatility of 92% and a return of 112%, while for Gold a Sharpe ratio of 0.7% and annualized volatility of 13% and a return of 9%.
