CoinShares Physical Bitcoin
A physically-backed Exchange Traded Product (ETP) providing secure, transparent exposure to the world's first and largest public blockchain.
Bitcoin's investment case
Strategic
Bitcoin portfolio allocation sharpe impact
- Small weightings of bitcoin within a multi-asset portfolio have historically had an outsized positive impact on both risk-adjusted returns and diversification relative to other alternative assets.
- Bitcoin’s historical lack of correlation to other assets make it a useful alternative asset that can help reduce exposure to economic cycles
- Quarterly adjustments (rebalancing) of Bitcoin, back to the original weight in the portfolio can help limit volatility and enhance returns
Fundamental
The term ‘digital gold’ has often been attached to Bitcoin, and not without good reason. Bitcoins are uniquely scarce — total bitcoin supply will never exceed 21 million - which means inflation is completely predictable and unchangeable.
Bitcoins are not printed by central banks, instead, they are discovered through a process of cryptographic computation (mining), and at significant cost.
- Bitcoin is fast establishing itself as a liquid store of value, with spot trade volumes up over 100x in the last 5 years (Source: Kaiko, CoinShares Research, data available as of November 2020)
- Bitcoin has a similar dilution rate to other hard assets like gold
- Over the course of 2019, the Bitcoin blockchain cleared US$1.9 trillion worth of transfer value (Source: CoinMetrics)
Tactical
There are multiple strategies available to traders looking for tactical opportunities within bitcoin markets. Among professional funds operating in bitcoin markets, we observe strategies such as: long/short, exchange arbitrage, carry/basis trades and hedging.
- Many of the indicators used for tactical purposes in bitcoin markets are the same as in traditional markets, such as price, spot volumes, derivatives volumes, futures basis and implied volatility
- The transparency of the Bitcoin blockchain also enables a range of unique indicators shedding light on the settlement activity of the system itself or the behavior of bitcoin holders, among these, we count the Network-to-Transaction Value Ratio (NTV), Spent Output Profit Ratio (SOPR) and address age analysis (UTXO Bands)
Bitcoin's investment case
Strategic
Bitcoin portfolio allocation sharpe impact
- Small weightings of bitcoin within a multi-asset portfolio have historically had an outsized positive impact on both risk-adjusted returns and diversification relative to other alternative assets.
- Bitcoin’s historical lack of correlation to other assets make it a useful alternative asset that can help reduce exposure to economic cycles
- Quarterly adjustments (rebalancing) of Bitcoin, back to the original weight in the portfolio can help limit volatility and enhance returns
Fundamental
The term ‘digital gold’ has often been attached to Bitcoin, and not without good reason. Bitcoins are uniquely scarce — total bitcoin supply will never exceed 21 million - which means inflation is completely predictable and unchangeable.
Bitcoins are not printed by central banks, instead, they are discovered through a process of cryptographic computation (mining), and at significant cost.
- Bitcoin is fast establishing itself as a liquid store of value, with spot trade volumes up over 100x in the last 5 years (Source: Kaiko, CoinShares Research, data available as of November 2020)
- Bitcoin has a similar dilution rate to other hard assets like gold
- Over the course of 2019, the Bitcoin blockchain cleared US$1.9 trillion worth of transfer value (Source: CoinMetrics)
Tactical
There are multiple strategies available to traders looking for tactical opportunities within bitcoin markets. Among professional funds operating in bitcoin markets, we observe strategies such as: long/short, exchange arbitrage, carry/basis trades and hedging.
- Many of the indicators used for tactical purposes in bitcoin markets are the same as in traditional markets, such as price, spot volumes, derivatives volumes, futures basis and implied volatility
- The transparency of the Bitcoin blockchain also enables a range of unique indicators shedding light on the settlement activity of the system itself or the behavior of bitcoin holders, among these, we count the Network-to-Transaction Value Ratio (NTV), Spent Output Profit Ratio (SOPR) and address age analysis (UTXO Bands)
The Bitcoin
Investment Universe
Click on each investment method to learn more
Exchange
Traded Products (ETPs)
Trade like shares, slot into existing brokerage accounts and portfolio management systems.
Exchange Traded
Products (ETPs)
Trade like shares, slot into existing brokerage accounts and portfolio management systems.
Brokers
Intermediaries such as CoinShares Capital Markets acting as a bridge between crypto exchanges and professional investors.
OTC
Trusts
Publicly traded investment trusts, bought and sold over-the-counter (OTC). Significant premiums often apply.
Bitcoin CFDs
Often offered by traditional trading platforms for high fees. Cash settled derivative contracts offering leveraged speculative trading.
Crypto
Exchanges
Exchange venues where individual investors can deposit fiat and trade crypto. Liquidity is fragmented across multiple venues.
Bitcoin
Futures
Regulated cash settled CME Bitcoin Futures, or ‘crypto only’ bitcoin settled futures via unregulated exchanges like BitMex.
Crypto Hedge
Funds
Hedge funds running active digital asset strategies, including quantitative, long only, long-short & multi-strategy.
Exchange
Traded Products (ETPs)
Trade like shares, slot into existing brokerage accounts and portfolio management systems.
CoinShares Physical ETP Structure
CoinShares Physical Bitcoin (BITC) is a physically backed exchange traded product (ETP). BITC Securities derive their value from bitcoin, which is securely held with Komainu - an institutional-grade regulated digital asset custodian.
CoinShares Physical ETP Structure
- Investor places buy order for BITC Securities with a Broker
- Broker either sources existing inventory or asks Liquidity Provider to apply for new BITC Securities
- Liquidity Provider purchases bitcoins in the crypto markets for delivery to the Issuer
- Liquidity Provider then sends bitcoin to the Issuer’s custodian
- Only after bitcoin has been received, Issuer delivers BITC Securities to Liquidity Provider
- Liquidity Provider settles securities with Broker and Investor receives those BITC Securities in exchange for the cash
- Investor places sell order with a Broker
- Broker sells BITC Securities to Liquidity Provider for cash
- Liquidity Provider delivers BITC Securities to Issuer
- Only after the BITC Securities have been delivered, Issuer delivers relevant amount of bitcoins to Liquidity Provider
- Liquidity Provider either holds or sells bitcoins for cash in the crypto markets
| Underlying Asset | Bitcoin |
| Base Currency | USD |
| Management fee | 0.98% |
| Bloomberg Code | BITC SW |
| Securities Lending | No |
| ISIN | GB00BLD4ZL17 |
| Leverage Factor | N/A |
| Coin Entitlement (CE) | 0.001 BTC at launch (Download CE Calculator) |
| Price per security | Coin Entitlement (CE) x Bitcoin price |
| Domicile | Jersey |
| Replication method | Physical |
| Legal structure | Debt Security (ETP) |
| UCITS Eligible | Yes *UCITS eligibility varies by jurisdiction. Please contact CoinShares if you would like to discuss. |
| UK Reporting Fund Status | Pending |
| Underlying Asset Verification | Armanino LLP (TrustExplorer) |
| Custodian | Komainu (Jersey) Limited |
| Administrator | JTC Fund Solutions (Jersey) Limited |
| Trustee | The Law Debenture Trust Corporation p.l.c. |
| Auditor | Baker Tilly Channel Islands Limited |
| Issuer | CoinShares Digital Securities Limited |
| Registrar | Computershare Investor Services (Jersey) Ltd |
| Country | Exchange | Trading Currency | Bloomberg Code | ISIN | SEDOL | WKN | Listing Date |
| Switzerland | SIX | USD | BITC SW | GB00BLD4ZL17 | BLD4ZL1 | A3GPMN | 19/01/2021 |
| Switzerland | SIX | EUR | BITCEUR SW | GB00BLD4ZL17 | BMDGG44 | A3GPMN | 19/01/2021 |
| Switzerland | SIX | GBP | BITCGBP SW | GB00BLD4ZL17 | BMDGG22 | A3GPMN | 19/01/2021 |
| Switzerland | SIX | CHF | BITCCHF SW | GB00BLD4ZL17 | BMDGG11 | A3GPMN | 19/01/2021 |
| Germany | Börse Xetra | EUR | BITC GY | GB00BLD4ZL17 | BMDGG44 | A3GPMN | 07/06/2021 |
How To Invest
Platforms
CoinShares Physical Bitcoin (BITC) can be bought and sold in the same way as shares or funds. You can invest in BITC via your existing investment platform or broker:
- Search for BITC, CoinShares Physical Bitcoin, or GB00BLD4ZL17 on your investment platform
- Input the number or value of securities you wish to buy or sell
- Place the order
Institutions
We’ve partnered with liquidity providers Flow Traders and Jane Street.
Our Capital Markets desk has decades of experience in traditional securities trading, and has also crucially been trading in spot and derivative crypto markets since 2014.
Institutions can contact us to discuss efficient execution, or for unique & direct insight into the digital asset ecosystem.
+31 207 996 777
[email protected]
+44 (0) 203 787 3333
[email protected]
FAQs
-
An Exchange Traded Product (ETP) is a financial instrument traded on a stock exchange, like shares. They can provide investors with exposure to a huge variety of investments, such as equities, commodities, fixed income, and cryptocurrencies, and can often be purchased through tax-efficient wrappers.
Similar to shares, ETPs can be bought and sold whenever the stock exchange is open as prices are quoted throughout the day, and can often be purchased through tax-efficient wrappers.
-
Every share of BITC is ‘physically backed’ by an amount of bitcoin, which is securely stored with a custodian. You can see how much bitcoin is backing your shares by checking the daily Coin Entitlement figure (i.e. how much bitcoin each BITC Security entitles the holder to).
-
We believe there are three main investment cases for bitcoin: strategic, fundamental and tactical. You can learn more about these here.
-
CoinShares is Europe’s largest digital asset ETP provider with over $2.9bn in assets under management for clients across the continent (as of 4 January 2021).
We pioneered the first regulated bitcoin fund in 2014, and are solely focused on cryptocurrencies and digital assets.
-
CoinShares Physical Bitcoin is listed on the SIX Swiss Exchange in Zurich, Switzerland's principal stock exchange.
-
The risk factors relating to the underlying cryptocurrencies are outlined in the Risk Factors section of the Prospectus.
-
ETPs provide exposure to a wide range of asset classes and indices that can be difficult or costly to access directly, whilst trading through the same brokers and platforms as shares.
Similar to shares, ETPs can be bought and sold whenever the stock exchange is open as prices are quoted throughout the day, and can often be purchased through tax-efficient wrappers.
Contact
