In brief

  • Bitcoin and Ethereum ETF provider CoinShares hit $1 billion in assets under management this week.
  • The figures came as demand for cryptocurrencies among institutions has increased globally.
  • Bitcoin is better suited as an economic hedge than gold, the firm said.

CoinShares, an established Bitcoin and crypto fund manager, crossed the $1 billion mark in assets under management (AUM) for its exchange-traded fund (ETF) product, according to a release Thursday.

CoinShares allows investors to invest in its XBT Provider products, in order to gain exposure to the crypto market without holding actual cryptocurrency or managing private keys. Its first exchange-traded Bitcoin ETF was launched in 2015, and its first Ethereum ETF in 2018.

Both products have been a hit. CoinShares said a grim macroeconomic outlook and adoption from big-name banks and fund managers have led its clients to make bigger bets in the crypto space, despite its volatile, unregulated, and risky nature. The appetite has led to a $1 billion total AUM for its products.

“The rapid growth of AUM within CoinShares’ XBT Provider family illustrates the increased drive from investors of all types to adopt cryptocurrencies into their investment strategy,” the firm said.

Crypto's role in a diversified portfolio

Chief revenue officer of CoinShares, Frank Spiteri, who also leads the XBT Provider platform, said that Bitcoin and other digital assets continue to “fascinate and intrigue” investors, especially as the global investment environment has changed and the need for alternative stores of value has risen.

“Traditional banks, brokerages, and asset managers are responding to the needs of their clients, and their clients want Bitcoin,” said Spiteri.

Meanwhile, CoinShares CEO Jean-Marie Mognetti said that reaching the billion-dollar mark was a validation of the firm’s belief that Bitcoin and other cryptocurrencies have a role to play in a diversified investment portfolio.

“If we compare with gold (which has over $200bn of AUM globally), we believe Bitcoin is better positioned to react aggressively to a current easing in fiscal and monetary policy,” he added.

Investors reconsider crypto and gold

A grim economic outlook has led several investors and firms to look at Bitcoin, alongside gold, as an alternative to cash and equities. Earlier this year, billionaire hedge fund manager Paul Tudor Jones said he held over one percent of his firm Tudor Investment’s AUM in Bitcoin futures.

This month, MicroStrategy, a public listed enterprise firm, also announced it had bought $250 million in Bitcoin as part of its treasury fund. The move came despite the firm’s founder and CEO, Michael Saylor, calling Bitcoin a passing fad in 2014. His outlook has since changed; earlier this month, he called Bitcoin the “future of money.”

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.