Many investors have been looking for ways to invest in bitcoin in a Sipp or Isa through a general broker account. Dominic Frisby says the fund fits the bill.
“Buy the rumour and sell the news” is an old market adage – and we got a classic genre yesterday.
This is a momentous day in the history of bitcoin. From an obscure chat board, to an open source experiment by a few computer programmers who changed their minds, to a mainstream investment vehicle.
And just yesterday, The country of El Salvador made bitcoin legal tender for the first time. The price of Bitcoin rose steadily after the report, from $30,000 to $53,000. Then came Bitcoin Day, and it made a splash: Bitcoins sold for between $7,000 and $46,000. The price of Bitcoin was “supposed” to rise. It doesn’t; Rumour makes it go up, news makes it go down.
How many times? It’s happened before and it will happen again.
How to bet on cryptocurrencies without having to own them
Traditional investors have long sought a vehicle to hold bitcoin through Sipp or Isa through a common broker account. Especially the older generation, they don’t want to have anything to do with wallets, keys, hard drives, safes and other things. They just want to be able to buy and sell bitcoin through regular brokers they know.
There have been several attempts to build bitcoin ETFs in response to this demand, but each has run into some sort of regulatory issue. Perhaps the most successful of these are the Greyscale Bitcoin Trust, which is listed in the US, and Coinshares XBT Bitcoin Tracker One, which is listed in Sweden. Neither is quite the same as owning bitcoin, but they do track prices.
But there’s another car that caught my eye and I think I should flag it for you today, because I think it could be very useful. This is the VanEck Vectors Digital Assets Equity UCITS ETF (LSE: DAGB).
In its own jargon, the companies it invests in are “driving the blockchain revolution”. That is, miners, exchanges, payment providers, service providers, and companies that hold and trade cryptocurrencies and crypto patents.
If I were to make a comparison, I would say that rather than buying gold, I would own a basket of gold mining companies or gold ETFs.
The ETF, which is listed in London, has been rising since early May. There is a us dollar version with the code DAPP, and perhaps the most useful sterling version with the code DAGB(there is also a Euro version in Germany (DAVV) and Italy (DAPP), and a Swiss Franc version in Switzerland (also called DAPP)).
It’s still small — very small — but it has the potential to grow as awareness grows. It holds 25 companies in total, with more than 75% in the US and Canada and more than 12% in China, and rebalances on a quarterly basis. I’ll post them below, but if you’re not familiar with them, I’ll outline the main features.
Its largest holding is Marathon Digital Holdings (MARA), a Nasdaq-listed bitcoin miner. Then there’s Square(NYSE :SQ), the payments company owned by Twitter personality Jack Dorsey, and Coinbase(NASDAQ :COIN), the wallet provider and exchange that recently went public.
Other miners it owns include Riot(NASDAQ :Riot), Hive(Vancouver :Hive) and Argo(London Stock Exchange :ARB), Other notable holding companies include fintech and cryptocurrency banking firm Silvergate(NYSE :SI) and Michael Saylor’s Microstrategy(NASDAQ :MSTR).
Over the past year, Thaler has become completely obsessed with bitcoin and has become one of its most vocal and articulate supporters. His company, Microstrategy, has transformed itself from a software company into a bitcoin holder with more than $5bn in bitcoins. He raised debt for it, so it’s a highly leveraged bitcoin investment.
Reprint indicated source：Spark Global Limited information