It is easy to understand the rationale for Mass Mutual’s $100 million investment into Bitcoin last year.  Around the world fiat currencies are being debased through monetary expansion. Like gold, Bitcoin represents one of the few assets at arm’s length from such events.

Yet I would suggest Bitcoin is misunderstood.

Yes Bitcoin is a non-systemic store of value.  But it is also a lot more.  Bitcoin is a template for new asset creation.  It is a model for how a new breed of non-collateralised asset can be built. 

In my opinion this template offers firms an unprecedented opportunity to create value for themselves and their investors by launching products based on the Bitcoin design.

Bitcoin is more than just the invention of the blockchain.
Bitcoin is more than just outstanding non-correlated returns.
Bitcoin demonstrates how to create non-collateralised assets.
It is a template that can be replicated and refined.
It is the basis of the new asset class.

On 30th December 2020 Van Eck filed a new application with the SEC for a Bitcoin ETF.  To what extent does the new asset class enable firms to compete with the Van Eck Bitcoin Trust by building their own Bitcoin product based on the new design? 

Compelling Investor Benefits

The new asset design can be used to produce digital or traditional products.  This means that it can create an exchange traded Bitcoin product that directly competes with traditional Mutual Funds and ETFs. 

It can be used to package an S&P500 product, an Apple product, or any other market.  For this example let us stay with Bitcoin.

As I write the Bitcoin is at $33,000.

GIVEN A CHOICE WHAT INVESTOR WOULD CHOOSE TO PAY $33,000 FOR BITCOIN WITH THE VAN ECK BITCOIN TRUST WHEN THEY CAN PARTICIPATE IN THE MARKET FOR JUST $330?

That is a price last seen in November 2013.  Yet this is exactly the compelling benefit a Bitcoin product based on the new design offers investors.  With the new design investors can participate in the price action of Bitcoin with the advantage of 100X gains built into the asset design.