What is the 21Shares BOLD Fund and how does it relate to Bitcoin and gold?
Bitcoin Meets Gold: 21Shares Launches BOLD Fund in London
Bitcoin’s digital scarcity and gold’s millennia-old store-of-value appeal are converging again-this time in London. 21Shares, a leading crypto ETP issuer in Europe, has brought its Bitcoin-and-gold allocation strategy to the UK market, extending the concept behind its 21Shares ByteTree BOLD ETP (originally launched in 2022 on SIX Swiss Exchange) to London’s institutional investor base. The move aligns with rising demand for diversified digital-asset exposure and the UK’s professional-only route for crypto exchange-traded products.
What Is BOLD? A Hybrid Bitcoin-and-Gold Strategy
The BOLD approach blends Bitcoin’s asymmetric growth potential with gold’s defensive characteristics in a single, rules-based vehicle. Rather than fixing weights, BOLD uses a risk-based methodology to dynamically tilt between the two assets, seeking a steadier ride than holding Bitcoin alone while retaining upside torque.
Key design principles
- Two-asset core: Bitcoin for growth; gold for stability and inflation hedging.
- Risk parity-style weights: Allocate more to the asset with lower recent volatility.
- Periodic rebalancing: Systematic, rules-driven updates to maintain the risk balance.
- Institutional-grade wrapper: Exchange-traded access with professional safeguards.
| Feature | Details |
|---|---|
| Assets | Bitcoin + gold |
| Method | Risk-based dynamic weights; periodic rebalance |
| Objective | Reduce volatility relative to pure BTC while preserving upside |
| Investor access (UK) | Professional/institutional only under FCA rules |
| Use case | Inflation hedge, diversification, treasury allocation |
Why London, Why Now? Crypto ETPs and UK Market Access
London remains a global hub for multi-asset portfolio construction, liquidity, and market infrastructure. The UK reopened a pathway for crypto exchange-traded notes in 2024-limited to professional investors-bringing institutional capital and compliance standards into sharper focus. A Bitcoin-and-gold strategy fits this context: institutions want more than single-asset beta, but they require transparent rules, operational robustness, and tight governance.
London professional-only access
- FCA stance: Crypto ETPs remain restricted to professional investors; retail access is not permitted in the UK.
- Institutional demand: Pension consultants, wealth managers, and hedge funds increasingly seek risk-managed crypto exposure.
- Portfolio fit: A blended BTC-gold sleeve can be easier to underwrite than a pure-Bitcoin allocation.
How BOLD Allocates Between Bitcoin and Gold
BOLD’s allocation engine is designed to lean into the asset with the “calmer” recent behavior, and lean away from the one with higher realized volatility. That often means a higher gold weight in turbulent crypto regimes and a higher Bitcoin weight in persistent uptrends with dampened volatility.
Risk parity in a crypto context
- Measure recent realized volatility for Bitcoin and gold over a defined lookback window.
- Assign weights inversely proportional to those volatilities (lower-volatility asset receives higher weight).
- Rebalance periodically to keep the risk contributions in check.
Benefits of the approach:
- Lower drawdowns than pure Bitcoin during crypto stress.
- Exposure to two distinct monetary assets with historically low-to-moderate correlation to equities and bonds.
- Rules-based transparency; no discretionary market timing.
Trade-offs to note:
- May lag pure-Bitcoin rallies if volatility stays elevated.
- Tracking differences vs. DIY allocations due to timing of rebalances and implementation costs.
Portfolio Use Cases and Investor Considerations
For crypto-native treasuries and TradFi allocators alike, a combined Bitcoin-gold sleeve can play several roles.
Where BOLD can fit
- Inflation hedge basket: Complements real assets and commodities.
- Alternative risk bucket: A diversifier alongside digital assets, commodities, and macro strategies.
- Treasury reserve: For firms seeking partial BTC upside with gold-based ballast.
Risk checklist
- Market risk: Bitcoin’s drawdowns can be severe; gold can underperform in risk-on, high real-yield regimes.
- Regulatory risk: UK access is limited to professional investors; rules can evolve.
- Liquidity and spreads: Check trading venue liquidity and creation/redemption mechanics.
- Operational due diligence: Review custodian arrangements, index methodology, and audit controls.
Competitive Landscape: Blends, Spot ETFs, and DIY
Investors weighing BOLD against alternatives typically compare:
- Pure spot Bitcoin ETFs/ETNs: Higher beta, higher volatility, simpler thesis.
- Gold ETFs/ETCs: Lower volatility, defensive carry; no crypto upside.
- DIY BTC-gold mixes: Customizable, but require ongoing rebalancing and governance.
- Multi-asset funds: Broader diversification, but many cannot hold crypto directly.
For allocators prioritizing simplicity with rules-based risk control, a single-ticket Bitcoin-gold exposure can reduce operational drag versus managing two lines and a rebalancing policy in-house.
BOLD at a Glance for London-Based Institutions
| Consideration | What to confirm |
|---|---|
| Structure and listing | Whether the instrument is an ETP/ETN and its eligible trading venues |
| Eligibility | Professional/institutional investor status under FCA rules |
| Methodology | Volatility lookback, rebalance frequency, and any weight caps |
| Costs | Total expense ratio, spreads, and any platform fees |
| Operations | Custody, creation/redemption, and assurance reports |
Conclusion: A Pragmatic Bridge Between Old and New Money
By extending its Bitcoin-gold strategy to London’s professional market, 21Shares is meeting allocators where they are: seeking exposure to digital monetary assets with disciplined risk management. BOLD’s rules-based blend doesn’t try to call the macro cycle-it systematizes it. For institutions building durable crypto sleeves, that may be the most important innovation of all: not just more beta, but better balance.
