Diversifying Your Portfolio: Bitcoin and Gold Team Up to Fight Inflation

Investors now have a new tool to protect their money from inflation. A recent fund combines Bitcoin and gold, aiming to shield wealth from the declining value of currencies like the U. S. dollar.

Bitwise Proficio Currency Debasement ETF (BPRO)

Ticker: BPRO
Trading Platform: NYSE
Managed By: Proficio Capital Partners (Boston-based firm managing around $5 billion)
Investment Strategy: Actively adjusts investments based on market conditions, with at least 25% always in gold.
Assets Included: Gold, silver, platinum, palladium, mining stocks, and Bitcoin.

Market Performance

Gold: Up 79% over the past year.
Silver: Up 207% over the past year.
Bitcoin: Down 15% over the same period, despite reaching a peak above $126,000 in October.

Addressing Currency Debasement

The fund aims to address concerns about governments printing too much money, leading to inflation and wealth loss. Matt Hougan, the Chief Investment Officer, sees currency debasement as a major risk to long-term financial health. He notes that the dollar has lost significant value over the past 15 years, and this trend is speeding up.

Designed for Financial Advisors

The fund is designed for financial advisors who may not have much exposure to assets that protect against wealth loss. Hougan even mentions his son's $10 trillion Zimbabwean dollar banknote as a reminder of hyperinflation's impact.

Higher Cost

The fund comes with a higher cost. Its expense ratio is 0.96%, compared to Bitwise's spot Bitcoin ETF, which has a lower 0.2% expense ratio.

Expert Opinions

Ray Dalio (Billionaire Hedge Fund Manager): Advises allocating 15% of portfolios to gold and Bitcoin, warning of a potential debt crisis.
Larry Fink (BlackRock CEO): Described Bitcoin and gold as "assets of fear." However, Bitcoin has recently behaved more like a risk-on asset.

Central Banks and Bitcoin Demand

Central banks aren't buying Bitcoin, but Hougan points to the demand from spot Bitcoin ETFs as a similar dynamic. These ETFs have been buying more than 100% of the Bitcoin mined each day since early 2024. Hougan believes this could lead to a parabolic move in Bitcoin's price, similar to gold's recent surge.