Crypto asset manager Bitwise debuted an exchange-traded fund on Thursday that offers exposure to cryptocurrency and precious metals, positioning the product as a way for investors to capitalize on the debasement of fiat currencies, including the U.S. dollar.
Today, the debasement trade has a new weapon in its arsenal.
“My view is that the biggest risk to the long-term financial health of a wealthy family is actually debasement,” he told Decrypt. “I’m not saying that the dollar is going in that direction, but it's lost a lot of value over the last 15 years, and that loss of value is accelerating.”
Hougan said the product is designed for financial advisors who may have “0% exposure to something that covers their biggest flank for losing wealth over time,” adding that his son owns a $10 trillion Zimbabwean dollar banknote as a curio. The country faced hyperinflation in 2008.
BPRO has an expense ratio of 0.96%, meaning that it’s more costly for investors to hold than Bitwise’s $3.5 billion spot Bitcoin ETF, which features a 0.2% expense ratio. That fund is the fifth-largest spot Bitcoin ETF in the U.S. by assets under management.
“The big demand category that's driven the gold move was central bank purchases, which started in earnest in 2022,” Hougan said. “Eventually, that excess demand dried up all the available supply, and we got this parabolic move.”
Central banks aren’t buying Bitcoin, but Hougan pointed to spot Bitcoin ETFs, and the demand they’ve seen from institutional investors, as a similar dynamic. Collectively, they’ve been buying more than 100% of the Bitcoin that’s mined each day since their debut in early 2024, he added.
“My thesis is, if ETF purchasers continue to buy more than 100% of the supply of Bitcoin, eventually it will have the same parabolic move that gold did,” he said. “It's really just supply and demand, and gold has this extra demand dynamic of central banks that Bitcoin doesn’t have.”
