ETFS 21Shares Bitcoin ETF
Exchange Code: EBTC
ETFS 21Shares Bitcoin ETF (Cboe: EBTC) offers exposure to physical Bitcoin, the best performing asset of the past decade. EBTC is Australia's first ETF to invest in Bitcoin.
EBTC tracks the performance of the price of Bitcoin in Australian dollars before fees and expenses. It provides holders with an interest in Bitcoin held in cold storage by Coinbase, the world's largest custodian of cryptocurrencies. It gives investors a way to trade bitcoin in a tightly regulated environment without needing to establish and maintain their own bitcoin wallets and the risks associated with that.
Bitcoin allows people to transfer digital money between each other without needing a financial middleman like a bank. It can be thought of as a digital or "crypto" currency that has no government behind it. While there are many other such online currencies these days, Bitcoin was the first and as of December 2021 remains the largest.
Why consider EBTC
Access to the best performing asset of the past 10 years.
Trade Bitcoin on reputable and highly regulated exchanges.
Trade Bitcoin without the worry of losing the private key to your digital wallet.
Since the crypto market is still relatively young, there can be issues with buying it directly. These include low exchange quality, weak custody arrangements, vulnerability to security problems, the loss of private keys and passwords, and much more. At ETF Securities, our mission is to bring a higher quality Bitcoin proposition than what is already available to Australians.
EBTC is 100% physically backed by Bitcoins, the private keys to which are segregated, and deposited into an offline wallet, also known as "cold storage". Investors can invest directly through their existing brokerage account and do not require any resources for the management, custody and security of Bitcoin.
There are various ways to secure a Bitcoin wallet, the popular ones being to encrypt a wallet by using a strong password or to make a backup of the wallet. However, the best method is cold storage which involves storing Bitcoin private keys offline, meaning away from any internet access. Keeping Bitcoins offline substantially reduces the threat of hacking. As an additional layer of security, all movements from these cold storage accounts require approvals from multiple individuals, as the private keys are “sharded” – meaning they are broken up and distributed across many global servers– before funds can be released.
Coinbase is the custodian. Coinbase’s vault has become the preferred storage of many institutions and it holds one of the largest stores of Bitcoins. The vault offers advanced encryption and key management, multi-signature Bitcoin addresses, military-grade physical security (like Faraday cages and former military bases) and highly secure processes to keep Bitcoins offline and geographically dispersed across three continents. The key to this process is removing all access to private keys via the internet by physically isolating them.
The net asset value, or NAV, of an ETF that holds shares is usually calculated using share prices at the close of trading. However, cryptocurrencies trade around the clock: there is no close. As such, the NAV of EBTC must be calculated using a reference benchmark.
For our purposes, we calculate the NAV by multiplying the coin entitlement of every outstanding EBTC unit by the price of bitcoin, as measured by CryptoCompare at 3pm Central European time. We then convert that amount into AUD using the WM/Refinitiv London 4pm AUD rate. We use European time as our partner, 21Shares, is based in Switzerland.
If you own EBTC, you have an entitlement to Bitcoin. How much Bitcoin you are entitled to per ETF is called the