The Latest on Bitcoin—Without the Jargon
Here is a jargon-free update about two recent developments involving bitcoin for investors: that one can earn interest on bitcoin and that a “Wall Street” infrastructure is being built.
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Participate in the revolution of money.
With money printed like never before, future proof your portfolio with “digital gold”.
| 1 Month | 3 Months | YTD | 1 Year |
3 Years (annualised) |
5 Years (annualised) |
|
| MVIS CryptoCompare Bitcoin VWAP Close Index | 31.50% | 126.38% | 55.72% | 410.84% | 61.03% | 160.13% |
Figures in the table as of 28 February 2021. Periods greater than one year are annualised. Source: VanEck, MVIS. Past performance is no guarantee of future results. Index performance is not representative of note performance. Investors cannot invest directly in the Index. For important information on the Index, please refer to the bottom of this page.
Gold, government currencies (e.g. the euro and the US Dollar) and bitcoin all have monetary value. This monetary value arises out of the collective belief that they are worth something – backed by the five traits of money.
Bitcoin fulfills these traits better than gold or any official currencies.
| Traits of Money | Gold | Government issued | Bitcoin |
| Fungibility | High | High | High |
| Durability | High | Moderate | High |
| High Divisibility | Moderate | Moderate | High |
| Scarcity | Moderate | Low | High |
| Portability | Moderate | High | High |
Bitcoin’s low correlation to traditional asset classes makes it ideal for diversifying a portfolio.
| Correlation 1/1/2015 to 31/8/2020 |
Bitcoin | S&P 500 | US Bonds | Gold | US Real Estate | Oil | Emerging Market Currencies |
| Bitcoin | – | 0.22 | 0.13 | 0.11 | 0.13 | 0.13 | 0.14 |
| S&P 500 | 0.22 | – | -0.07 | 0.01 | 0.64 | 0.56 | 0.42 |
| US Bonds | 0.13 | -0.07 | – | 0.59 | 0.39 | -0.10 | 0.32 |
| Gold | 0.11 | 0.01 | 0.59 | – | 0.13 | 0.04 | 0.52 |
| US Real Estate | 0.13 | 0.64 | 0.39 | 0.13 | – | 0.33 | 0.41 |
| Oil | 0.13 | 0.56 | -0.10 | 0.04 | 0.33 | – | 0.33 |
| Emerging Market Currencies | 0.14 | 0.42 | 0.32 | 0.52 | 0.41 | 0.33 | – |
Source: Morningstar. Data as of 31 August 2020. Bitcoin is measured by the MVIS CryptoCompare Bitcoin VWAP Close Index; US Bonds is measured by the Bloomberg Barclays US Aggregate Index; Gold is measured by the S&P GSCI Gold Spot Index; US Real Estate is measured by the MSCI US REIT Index; Oil is measured by the Brent Crude oil spot price, Emerging Market Currencies is measured by the Bloomberg Barclays EM Local Currency Government Index.
Asymmetric Return Profile (1/2/2012 - 31/8/2020)
| Cumulative Return | Annualized Return | Std Dev | Sharpe Ratio | Beta | |
| S&P 500 TR (1989) | 218.84 | 14.46 | 12.94 | 1.06 | 1.00 |
| BBgBarc US Agg Bond TR USD | 33.17 | 3.39 | 3.02 | 0.90 | -0.01 |
| 60% Equities 40% Bonds |
129.29 | 10.15 | 7.78 | 1.19 | 0.59 |
Source: Morningstar. Data as of 31 August 2020; past performance is no guarantee of future results. Index performance is not representative of the product performance. Investors cannot invest directly in the Index. For important information, please refer to the bottom of this page.
Asymmetric Return Profile (1/2/2012 - 31/8/2020)
| Cumulative Return | Annualized Return | Std Dev | Sharpe Ratio | Beta | |
| S&P 500 TR (1989) | 218.84 | 14.46 | 12.94 | 1.06 | 1.00 |
| BBgBarc US Agg Bond TR USD | 33.17 | 3.39 | 3.02 | 0.90 | -0.01 |
| 59.75% Equities 39.75% Bonds 0.5% Bitcoin |
145.07 | 11.01 | 7.94 | 1.27 | 0.60 |
Source: Morningstar. Data as of 31 August 2020; past performance is no guarantee of future results. Index performance is not representative of the product performance. Investors cannot invest directly in the Index. For important information, please refer to the bottom of this page.
Asymmetric Return Profile (1/2/2012 - 31/8/2020)
| Cumulative Return | Annualized Return | Std Dev | Sharpe Ratio | Beta | |
| S&P 500 TR (1989) | 218.84 | 14.46 | 12.94 | 1.06 | 1.00 |
| BBgBarc US Agg Bond TR USD | 33.17 | 3.39 | 3.02 | 0.90 | -0.01 |
| 59.5% Equities 39.5% Bonds 1% Bitcoin |
161.74 | 11.86 | 8.20 | 1.32 | 0.61 |
Source: Morningstar. Data as of 31 August 2020; past performance is no guarantee of future results. Index performance is not representative of the product performance. Investors cannot invest directly in the Index. For important information, please refer to the bottom of this page.
Asymmetric Return Profile (1/2/2012 - 31/8/2020)
| Cumulative Return | Annualized Return | Std Dev | Sharpe Ratio | Beta | |
| S&P 500 TR (1989) | 218.84 | 14.46 | 12.94 | 1.06 | 1.00 |
| BBgBarc US Agg Bond TR USD | 33.17 | 3.39 | 3.02 | 0.90 | -0.01 |
| 58.5% Equities 38.5% Bonds 3% Bitcoin |
238.23 | 15.25 | 10.08 | 1.39 | 0.64 |
Source: Morningstar. Data as of 31 August 2020; past performance is no guarantee of future results. Index performance is not representative of the product performance. Investors cannot invest directly in the Index. For important information, please refer to the bottom of this page.
The VanEck Vectors Bitcoin ETN is a fully-collateralized exchange traded note listed on the regulated segment of Deutsche Boerse Xetra.
ISIN: DE000A28M8D0
Bank Frick & Co. AG, a fully licensed credit institution, is a regulated custodian under the “Law on Tokens and Trusted Technology Service Providers” (TTTL, or “Blockchain Act”) from 1 January 2020 and a holder of a “TT Token Depositary” license.
Risks to consider: Custodian might not be able to protect the digital assets against sophisticated hacking attacks.
The VanEck Vectors Bitcoin ETN is easy to trade like any other regular and liquid financial asset.
Through VanEck Vectors Bitcoin ETN
The ETF & ETP segment of Deutsche Börse AG is a trading segment for ETFs, ETCs and ETNs to enhance liquidity and increase transparency of trade in the securities listed.
The performance of the ETN is directly linked to the price of bitcoin. The product replicates the price and yield performance of the MVIS CryptoCompare Bitcoin VWAP Close Index.
Exchanges have to meet an extensive list of criteria before their bitcoin prices are taken into account.
Every Euro invested into the VanEck Vectors Bitcoin ETN will be used to buy bitcoin.
Despite all the hype, digital assets are a highly risky investment. Below are key risk factors that need to be considered before making an investment (please note that this list is not inclusive and a complete list of risk factors can be found in the base prospectus of the programme).
The issuer intends to invest in a single digital asset. Because the class of digital asset investments is growing at a rapid pace, all risks relating to the underlying technology may not be known. As new digital assets develop and attract interest from the development community and investors, they may also become greater targets for exploitation.
Digital assets are a new technological innovation with a limited history. There is no assurance that usage of digital assets will continue to grow. A contraction in use of digital assets may result in increased volatility or a reduction in the price of such digital assets, which could adversely impact the value of the Notes. For example, bitcoin, one of the earliest digital assets, was invented in 2009. Digital assets and their respective trading histories have therefore existed for a relatively short time, which limits a potential investor’s ability to evaluate an investment in the Notes.
Speculators and investors who seek to profit from trading and holding digital assets generate a significant portion of the demand for such digital assets. Speculation regarding future appreciation in the value of digital assets may inflate and make more volatile the price of such digital assets. As a result, digital assets may be more likely to fluctuate in value due to changing investor confidence in future appreciation in the price of digital assets.
Regulators and governments in various jurisdictions have focused on regulation of digital assets. Digital asset market disruptions and resulting governmental interventions are unpredictable, and may make digital assets or certain digital assets illegal altogether. Future regulations and directives in some jurisdictions may conflict with those others, and such regulatory actions may restrict or make some or all digital assets illegal in some jurisdictions. Future regulations and directives may impact the demand for digital assets, and may also affect the ability of digital assets exchanges to operate and for other market participants to enter into digital assets transactions.
Here is a jargon-free update about two recent developments involving bitcoin for investors: that one can earn interest on bitcoin and that a “Wall Street” infrastructure is being built.
Read Blog