An actively managed fund combines Bitcoin, precious metals, and mining stocks as asset managers look for more ways to use crypto in macro and capital-preservation strategies.
Bitwise Asset Management has started a new exchange-traded fund (ETF) to protect against currency devaluation. This shows how digital assets are becoming more and more a part of larger macro investing strategies after the success of spot Bitcoin ETFs.
Bitwise announced the Bitwise Proficio Currency Debasement ETF on Thursday. It trades on the NYSE under the symbol BPRO. The actively managed fund wants to fix the problem of fiat currencies losing value by investing in Bitcoin (BTC$89,751), precious metals, and mining stocks.
Portfolio construction and investment mandate
Unlike spot Bitcoin ETFs, BPRO allows you to decide how much to put into crypto and commodity-linked assets. It looks like the structure is for financial managers who want to invest in Bitcoin without having to buy a single-asset crypto product, which is good given inflation fears are still strong.
The fund always has at least 25% of its money in gold, and its expense ratio is 0.96%.
The fund’s main goal is to protect its capital, not to focus on its potential for growth. This framework indicates how stories about bitcoin are changing in institutional markets.
Even though gold has performed well over time, Bob Haber, the head of investments at Proficio Capital Partners, stated that it still remains a “ghost” in the modern portfolio. He cited research from Goldman Sachs that showed gold ETFs make up less than 1% of private financial holdings.
The progressive loss of purchasing value over time with fiat currency has been a major issue in the Bitcoin community for a long time.
Bitcoin’s role as a debasement hedge under scrutiny
Marketers often market Bitcoin as a long-term protection against debasement due to its fixed supply and strong performance since its inception. But even with those qualities, Bitcoin hasn’t done as well as gold lately, which makes people wonder how well it works as a hedge against debasement in the present macro climate.
Karel Mercx, an investing expert at the Dutch consultancy firm Beleggers Belangen, said in a recent report that Bitcoin has not worked as a solid hedge against currency debasement.
Mercx says that the most shocking evidence was when Bitcoin fell short of expectations as US President Donald Trump publicly attacked the Federal Reserve’s independence.
When a central bank is under political pressure, people worry about the legitimacy of the money and the risks of inflation in the long run. These are situations that have historically helped assets that are viewed as repositories of value. Gold reacted to those signals, but Bitcoin did not, which made it less useful as a short-term hedge against currency debasement.