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BFM Crypto, le Club: Investing in the crypto ecosystem without investing in cryptocurrencies – 11/05




During this interview, Cyril Sabbagh, designer of our Bitcoin thematic ETF, discussed the following questions:

1-    How is the performance of your Bitcoin ETF now?

2-    Is it a crypto ETF without crypto inside?

3-    Why did you choose not to invest in crypto?

4-    How important is the correlation between Nasdaq and crypto ETF?

5-    Is the crypto ecosystem rich enough to keep your Bitcoin ETF diversified?

6-    Can you illustrate one or two companies from this crypto ETF?

As a start, Cyril mentioned that the whole crypto ecosystem is suffering now which will affect our crypto thematic ETF as well.  

After that, he discussed the composition of the world’s first Bitcoin thematic UCITS ETF, as there’s no active cryptocurrencies or Bitcoin but there are companies that belong to the crypto ecosystem for example companies that offer crypto services and crypto financial solutions.

Cyril also explained the reason behind this choice: To have the famous UCITS stamp, it is not allowed, in this ultra-secure regulatory framework, to be able to integrate cryptos yet.

He highlighted the correlation between Nasdaq and the crypto ETF by giving the example of what happened at the start of the Russia-Ukraine crisis where the correlation between Bitcoin and Nasdaq was very low (around 20%),therefore, we should know that the concept of correlation is linked to the period meaning that there is a very strong correlation now indeed.

In addition to that, Cyril discussed the increasing importance of the crypto ecosystem. When we started this project there were a few crypto miners who were listed. Today, not a week goes by without an IPO in this crypto ecosystem. The important point about this Bitcoin ETF is that we are interested in the sensitivity of each company to Bitcoin:  30 companies are chosen based on the ones with the highest sensitivity and the largest beta in relation to bitcoin, where they will be weighted accordingly.

At the end, he chose 2 companies to talk about: Argo Blockchain and Silvergate Capital. The first is a crypto mining company listed in the UK and focuses mainly on green mining through solar and hydraulic systems. The second is a US crypto bank that offers custodial services.

Attention: Past performance does not guarantee future performance.

Our latest research output: A Bitcoin Equities ETF

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