News of Moody’s downgrade of U.S. credit sent markets wobbling on Monday, with major equity indexes closing relatively flat after a volatile day of trading. Bitcoin prices fell before recovering while the U.S. dollar weakened and bond yields rose. The “digital gold” cryptocurrency remains one to watch this year for those with the risk appetite.
Moody’s was the last of the major credit bureaus to slash their AAA rating of U.S. credit, downgrading to Aa1, reported CNBC. The rating agency cited mounting government debts and high interest rates as reasons for the cut. U.S. bond yields surged, with the 30-year Treasury spiking over 5% briefly, and the dollar weakened.
On Monday, bitcoin dropped from weekend highs of $106,500 before regaining ground to $105,500 at traditional market close. While volatile, the “digital gold” cryptocurrency continues to draw investor attention. For some, the decentralized nature holds strong appeal, while others appreciate it as a store of value with its supply scarcity and ease of portability compared to gold. Ease of access via ETFs also helps drive greater liquidity and adoption. Increasing institutional adoption is a trend to watch as well, as it could help drive further price gains looking ahead.
Invest in "Digital Gold" With BRRR
The CoinShares Valkyrie Bitcoin Fund (BRRR ) is a fund worth consideration for investors with the risk appetite for bitcoin’s volatility. The fund provides exposure to bitcoin’s price movements with the ease of access through traditional brokerages. Through BRRR, investors can capture bitcoin price movements while avoiding many of the extra steps required with direct bitcoin investment, such as storage.
BRRR seeks to reflect the price performance of the CME CF Bitcoin Reference Rate – New York Variant, minus fees and expenses. This index uses the same six bitcoin exchanges as the CME CF Bitcoin Reference Rate, but calculates bitcoin’s price at New York Market close (4 p.m. ET).
The fund is a trust that passively holds bitcoin (meaning it’s physically backed). Shares held are tied to the value of the bitcoin held. It also is not an investment company, and therefore does not fall under the 1940 Act. The bitcoin held is custodied by Coinbase, BitGo, and Komainu, with private keys kept in cold storage. In other words, the means to access the bitcoin held by the custodians remains offline, disconnected from the internet. This provides an extra layer of protection from hacking.
BRRR carries management fees of 0.25%.
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