In a significant move for the cryptocurrency and precious metals markets, Bitwise launched an innovative exchange-traded fund (ETF) on Thursday designed to provide investors with exposure to both Bitcoin and gold. The Bitwise Proficio Currency Debasement ETF, trading under the ticker symbol BPRO on the NYSE, is a partnership with Proficio Capital Partners, a Boston-based investment advisory firm managing approximately $5 billion in assets.
The ETF is actively managed, meaning its asset allocations will adjust according to prevailing market conditions. Notably, the fund aims to maintain at least a 25% allocation in gold and will also invest strategically in silver, platinum, palladium, mining equities, and Bitcoin. This diverse approach aligns with an increasing interest in investments that can weather the impacts of fiat currency debasement, particularly as concerns grow over inflation and government monetary policies.
Matt Hougan, Chief Investment Officer at Bitwise, emphasized the importance of debasement as a primary concern for long-term wealth preservation. He highlighted the decreasing purchasing power of the U.S. dollar, which has lost significant value over the past 15 years, asserting that this trend is unlikely to reverse soon. As evidence, Hougan pointed out the steep increases in gold and silver prices over the last year, with gold climbing 79% and silver soaring 207%, while Bitcoin’s value has diminished by 15% during the same period.
The timing of BPRO’s launch comes amid growing fears that governments may resort to financing deficits through money printing, thus exacerbating inflation and potentially leading to a rapid loss of wealth. Hougan noted that the product is specifically tailored for financial advisors who might currently have no exposure to such assets, urging them to consider the fund as a hedge against loss of wealth over time.
Despite BPRO’s appeal, it comes with a higher expense ratio of 0.96%, which is significantly steeper than Bitwise’s existing $3.5 billion spot Bitcoin ETF that boasts a mere 0.2% expense ratio. This pricing reflects the challenges associated with actively managed funds but positions BPRO within a growing market trend aimed at safeguarding investments against systemic financial risks.
Influential figures in the finance world, like hedge fund manager Ray Dalio, have been vocal about the necessity of allocating portions of investment portfolios to gold and Bitcoin, especially against the backdrop of an impending debt crisis among major economies. Although Dalio has expressed a stronger preference for gold—pointing to the central bank purchases fueling its demand—Hougan believes Bitcoin can also benefit from market dynamics similar to those that propelled gold’s recent parabolic price movement.
Additionally, while Bitcoin tends to act like a risk-on asset, the demand for Bitcoin from institutional investors has skyrocketed. Hougan noted that since the introduction of Bitcoin ETFs in early 2024, purchases have exceeded 100% of the daily Bitcoin mined, an indication of strong institutional interest.
With the introduction of BPRO, Bitwise aims to capture the growing momentum surrounding currency debasement as an investment theme, providing a novel tool for advisors and their clients looking to diversify and protect their wealth amidst economic uncertainties.
