CoinShares, a global leader in digital asset ETFs, recently highlighted the core value propositions of Bitcoin for modern investors and advisors. As the first firm to launch a digital asset exchange-traded product in Europe, CoinShares manages over $10 billion in assets under management (AUM). In a detailed discussion with VettaFi's investment strategist, Cinthia Murphy, CoinShares' analysts Matthew Kimmell and Calvin Tintle delved into the fundamentals of Bitcoin investing.
The Fundamental Value of Bitcoin
Matthew Kimmell, a digital asset analyst at CoinShares, emphasized that Bitcoin's value stems from its unique properties: scarcity, decentralization, and the robustness of the Bitcoin network itself. Originating in 2009, Bitcoin operates on a decentralized blockchain that functions as a secure, transparent ledger for transactions, ensuring integrity through duplication across blocks.
Bitcoin as a Store of Value
Initially designed for global digital payments, Bitcoin has evolved primarily into a store of value rather than a medium of exchange. Kimmell noted its scarcity, with a capped supply of 21 million coins, making it an attractive asset for investors seeking to preserve wealth. While it still supports use cases like cross-border payments and acts as a hedge during geopolitical crises, most investors buy and hold Bitcoin for speculation or savings.
The approval of Bitcoin futures ETFs in 2021 and spot Bitcoin ETFs in 2024 has spurred significant inflows from both retail and institutional investors. Favorable U.S. regulation, as highlighted by Calvin Tintle, senior manager at CoinShares, ensures that investments in SEC-approved ETFs are secure. Bitcoin now ranks as the sixth-largest global asset, trailing only giants like gold and major tech stocks, with portfolio allocations typically ranging from 1% to 5%.
Accessing Bitcoin Through ETFs
For those looking to invest, the CoinShares Valkyrie Bitcoin Fund (BRRR) offers a straightforward way to gain exposure to Bitcoin's price movements through traditional brokerages. This fund tracks the CME CF Bitcoin Reference Rate – New York Variant, minus a 0.25% management fee, and is physically backed by Bitcoin held in secure custody by Coinbase, BitGo, and Komainu. Private keys are stored offline in cold storage, enhancing security against hacking.
This approach eliminates the complexities of direct Bitcoin investment, such as storage concerns, making it accessible for a broader audience.
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