Ben Strack

<div id="highlights-block_628da3bc1164c" class="highlights">
 <ul>
 <li>Product is designed to offer collateralized dollar-denominated yield at a 5% rate</li>
 <li>21Shares is looking into expanding its presence in several dozen countries</li>
 </ul>
 
</div>



Cryptocurrency exchange-traded product issuer 21Shares’ latest fund is designed to divvy up yields&nbsp; to investors amid concerns around inflation and fluctuating interest rates.&nbsp;



The 21Shares USD Yield ETP (USDY) offers collateralized dollar-denominated yield at a 5% rate, the firm told Blockworks. The product generates yield by taking in US dollars and lending them to crypto counterparties against a minimum of 110% collateral in bitcoin and ether marked-to-market daily.



USDY — an exchange-traded product (ETP) — is set to become available on the SIX Swiss exchange on Wednesday and is available to investors in US dollars, with a fee of 30 basis points.&nbsp;&nbsp;



“We see this ETP as a useful tool for investors to navigate market volatility and stay invested through complex market conditions — like today’s,” 21Shares President Ophelia Snyder said. “While investors grapple with inflation, fluctuating interest rates and a range of economic pressures, this product is a first-of-its-kind way for investors to both gain maximum exposure to risk-adjusted yield and preserve liquidity in their portfolios.”&nbsp;



21Shares, which has more than $2.5 billion of assets under management, has launched a range of digital asset investment products this year, with more in the pipeline.



The Switzerland-based company earlier this month launched two <a href="https://cms.blockworks.co/21shares-two-latest-crypto-funds-keying-in-on-defi/" target="_blank" rel="noreferrer noopener">DeFi-focused ETPs</a> and more recently <a href="https://cms.blockworks.co/worlds-largest-crypto-exchange-traded-product-issuer-enters-us-market/" target="_blank" rel="noreferrer noopener">entered the US market</a> with two index funds offering diversified exposure to some of the space’s largest assets.



21Shares intends to launch between 20 and 30 additional ETPs by the end of this year, Snyder said.&nbsp;



The executive previously told Blockworks that 21Shares intends to establish a Middle Eastern foothold next month in Dubai. Snyder added that the company is looking at bolstering its presence in several dozen countries around the world.



“Our goal is to build bridges between the cryptocurrency and institutional investing world and increase accessibility to some of the world’s largest cryptocurrencies and blockchain ecosystems,” Snyder said.&nbsp;



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21Shares

Latest Crypto Fund Offers Yield on USD Amid Rampant Inflation

<div id="highlights-block_6268648d33c22" class="highlights">
 <ul>
 <li>The new exchange-traded product is designed to offer uncorrelated returns and wealth protection amid inflation</li>
 <li>Its current allocations are 18.5% bitcoin and 81.5% gold</li>
 </ul>
 
</div>



21Shares has continued its product launch spree as the firm, this time, has chosen to combine gold and bitcoin exposures.&nbsp;&nbsp;



The world’s largest issuer of cryptocurrency exchange-traded products (ETPs) has teamed up with UK-based <a href="https://bytetreeam.com" target="_blank" rel="noreferrer noopener">ByteTree Asset Management</a> to list the 21Shares ByteTree BOLD ETP (BOLD) on the SIX Swiss Exchange.



The fund is designed to offer uncorrelated long-term returns and wealth protection in an inflationary environment, 21Shares said in a Wednesday statement. It tracks an index that rebalances monthly, with assets weighted in inverse proportion to their risk; the current allocations are 18.5% bitcoin and 81.5% gold.&nbsp;



The ETP is the first of its kind and combines the traditional value of gold with the promising return rates of bitcoin — which many consider the new gold, according to 21Shares CEO Hany Rashwan.



“BOLD seeks to take away the hassle of personally managing the two assets while imposing a disciplined process when it comes to delivering higher risk-adjusted returns,” Rashwan told Blockworks. “We expect to see both retail and professional investors across Europe invest in BOLD as an easy way to gain exposure to cryptocurrencies.”



The Federal Reserve <a href="https://cms.blockworks.co/fed-raises-interest-rates-a-quarter-percentage-point/" target="_blank" rel="noreferrer noopener">last month raised</a> the benchmark interest rate a quarter percentage point in response to inflation rising at the fastest pace in four decades. The central bank signaled at the time there will be seven more rate hikes in 2022.&nbsp;



“Gold has historically delivered portfolio protection in inflationary environments, while bitcoin is the digital equivalent of gold with growing adoption by investors as a distinct asset class and a core store of wealth,” ByteTree Asset Management CEO Charlie Erith said in a statement.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“In a time of rising structural inflation and heightened geopolitical risk, we believe this can act as an important risk and return diversifier in a balanced portfolio.”</blockquote>



The product comes to market after other issuers have sought to combine exposure to these assets in the same strategy.&nbsp;



WisdomTree began allowing its Enhanced Commodity Strategy Fund (GCC) to allocate up to 5% of its net assets in bitcoin futures contracts last year. The fund also invests in the futures contracts of more than a dozen commodities, including gold.



Amplify ETFs <a href="https://cms.blockworks.co/amplify-etfs-ceo-you-want-to-own-bitcoin-amid-inflation/" target="_blank" rel="noreferrer noopener">launched</a> its Inflation Fighter ETF (IWIN) in February, which offers exposure to a range of stocks, REITs, currencies and commodities, including gold and bitcoin.&nbsp;



Fund group VanEck <a href="https://www.sec.gov/Archives/edgar/data/1137360/000113736021001182/vvtgoldandbitcoinstrategye.htm" target="_blank" rel="noreferrer noopener">filed in December</a> for an ETF that would invest in gold and bitcoin futures contracts, gold-linked instruments, and exchange-traded products that provide exposure to gold or bitcoin.



Nate Geraci, president of The ETF Store, questioned at the time who VanEck was marketing to, noting that “gold bugs and the bitcoin maxis tend to go at each other’s throats.”



Frank Holmes, executive chairman of HIVE Blockchain Technologies, <a href="https://cms.blockworks.co/michael-saylor-bullish-on-promise-of-crypto-regulation/" target="_blank" rel="noreferrer noopener">said during a panel</a> at the Exchange ETF conference earlier this month that gold “will always be there.” He noted, however, that millennials and certain “sophisticated” older investors are shifting from gold to bitcoin.



MicroStrategy CEO Michael Saylor agreed that gold will continue to be a non-sovereign store of value for certain investors, but added that 21st century ideas like bitcoin have the power to “turn the world upside down.”



21Shares has roughly $2.5 billion in assets under management. Its products are listed on 10 regulated European exchanges.The company has launched a handful of ETPs this year, including products with Aave (AAVE), Chainlink (LINK) and Uniswap (UNI) as their underlying assets. 21Shares <a href="https://cms.blockworks.co/first-australian-spot-bitcoin-ether-etfs-to-go-live-next-week/" target="_blank" rel="noreferrer noopener">expects to bring to market</a> the first Australian ETFs to invest directly in bitcoin and ether this week.



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<ul class="wp-block-list">
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