“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, that has listed with the ticker BOLD.
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.
“It struck me that bitcoin and gold were always counter cyclical.
With the traditional balanced portfolio of 60 per cent equities, 40 per cent bonds struggling this year as both asset classes have sold off simultaneously, Morris said “60/40 works in a deflationary period.
Morris said costs were pushed up by the difficulty of finding a custodian able and willing to handle both physical gold and bitcoin.
The portfolio is reminiscent of that described by Ray Dalio, founder of hedge fund group Bridgewater Associates, when asked whether he would choose dollars, gold or bitcoin to put under his bed for a rainy day.
“But does anybody think that gold is going to go up indefinitely? Probably not.
As for the cryptocurrency side of the ledger, Lamont said “if you don’t want the volatility of bitcoin, then maybe you shouldn’t be involved in bitcoin.