First combined gold-bitcoin ETF set to launch in Europe

First combined gold-bitcoin ETF set to launch in Europe

The first exchange traded product to combine gold and bitcoin in a single fund is set to debut on Wednesday.

The fund will combine a millennia-old store of value with an upstart security that some have touted as the “new digital gold” — even if bitcoin’s slide in recent months has tarnished any reputation it may have had as a haven in troubled or inflationary times.

“We are making bitcoin an acceptable asset to hold and bringing gold into the 21st century,” said Charlie Morris, chief investment officer of ByteTree Asset Management, which is behind the 21Shares ByteTree Bold Index ETP, due to list on the SIX Swiss Exchange with the ticker BOLD. A German listing is expected to follow later.

While gold ETPs and spot bitcoin ETPs are both widely available independently — in continental Europe at least — Morris claimed that ByteTree’s active rebalancing strategy had improved returns by 7-8 percentage points a year in backtesting.

The fund will rebalance monthly based on 360-day historic volatility, with the less volatile asset having a higher weighting in an attempt to maximise risk-weighted returns. In reality, this means gold tends to dominate the portfolio, with a weighting of between 70 and 90 per cent