Global X 21Shares Bitcoin ETF
Invest in Bitcoin with Global X.
Global X 21Shares Bitcoin ETF (EBTC) offers exposure to physical Bitcoin.
EBTC tracks the performance of the price of Bitcoin in Australian dollars before fees and expenses. It provides holders exposure to Bitcoins held in cold storage by Coinbase, the world’s largest custodian of cryptocurrency. It gives investors a way to trade Bitcoin in a tightly regulated environment without the need to have their own Bitcoin wallets.
- Bitcoin supply is capped at 21 million, and as of June 2022 more than 19 million Bitcoins are in circulation, which is ~91% of the total supply1.
- The last Bitcoin is estimated to be mined in 2140.
1 https://learn.bybit.com/crypto/21-million-bitcoin-limit-mined/
Bitcoin allows people to transfer digital money to each other without needing a financial middleman like a bank. It can be thought of as an online currency that has no government behind it. While there are many other such online cryptocurrencies these days, Bitcoin was the first and as of April 2022 remains the largest. Bitcoin is based on two technologies: blockchain and proof-of-work mining.
Blockchain can be thought of as a distributed spreadsheet that no one can deceive. Blockchains get their name from the fact that they hold a long list of records, called “blocks”, that link to each other as in a chain. Adding new data – or a block – to the blockchain requires proof of work mining, which is done by “Bitcoin miners”. These miners compete, crunching through vast amounts of numbers, in an effort to find a unique verification code. Once found, this code allows a new block to be added to the blockchain. Miners are rewarded with freshly minted Bitcoins.
- Cryptocurrency: are like online tokens. They are based on different kinds of blockchain technology, each of which have different uses. Bitcoin is one cryptocurrency, but there are many others.
- Blockchain: is an online data structure. Its name is derived from the fact that they hold a list of records, called “blocks”, that link to each other in a “chain”. Adding new data (blocks) to the blockchain requires proof of work mining, making deception difficult.
- Proof of Work Mining: is how new blocks are added to a blockchain. It requires using lots of computers to solve mathematical challenges that are embedded in a block’s hash. The Bitcoin network then verifies or rejects the answer to the mathematical problem.
- Hash: is similar to a fingerprint and is the unique identifier for every block on a blockchain. Blocks chain together by containing pieces of the hash of the previous block.
- Cold Storage: is where the private keys used to access and transact in Bitcoin are stored offline entirely without internet access. It is often thought to be more secure than a Bitcoin wallet as there is no access route for hackers.
- EBTC is 100% fully backed by actual Bitcoins.
- Bitcoins are held in cold storage by Coinbase, the leading cryptocurrency exchange and custodian, preventing hackers accessing them.
- Creation and redemption of new Bitcoin ETFs is managed by 21Shares, one of the world’s largest crypto ETP providers.
- Investors in EBTC can redeem their units for the underlying Bitcoins, which are held on trust for them.
- Achieve diversification by investing in a new asset class.
- As a satellite or alpha tilt, given its potentially higher risk-return profile than equities.
- As a hedge against currency debasement and inflation, given it is not a fiat currency.
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The issuer of units in Global X 21Shares Bitcoin ETF (EBTC) ARSN: 653 122 215 is the responsible entity of the Fund, being Global X Management (AUS) Limited (AFSL 466778) (“Global X”). The product disclosure statement (PDS) for the Fund contains all of the details of the offer of units in the Fund. Copies of the PDS are available from Global X Management (AUS) Limited or at www.globalxetfs.com.au. In respect of each retail product, Global X has prepared a target market determination (TMD) which describes the type of customers who the relevant retail product is likely to be appropriate for. The TMD also specifies distribution conditions and restrictions that will help ensure the relevant product is likely to reach customers in the target market. Each TMD is available at www.globalxetfs.com.au. The information provided in this document is general in nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information in this document, you should consider the appropriateness of the information having regard to your objectives, financial situation or needs and consider seeking independent financial, legal, tax and other relevant advice having regard to your particular circumstances. Any investment decision should only be made after obtaining and considering the relevant PDS and TMD. Investments in any product issued by Global X are subject to investment risk, including possible delays in repayment and loss of income and principal invested. None of Global X, the group of companies which Mirae Asset Global Investments Co., Ltd is the parent , or their respective directors, employees or agents guarantees the performance of any products issued by Global X or the repayment of capital or any particular rate of return therefrom. The value or return of an investment will fluctuate and an investor may lose some or all of their investment. Past performance is not a reliable indicator of future performance.
CryptoCompare’s Crypto Coin Comparison Aggregated Index (“CCCAGG”) is used with the permission of CC Data Ltd and has been licensed for use by Global X Management (AUS) Limited (Global X) in connection with the EBTC (the “Product”). Neither Global X nor the Product, as applicable, is sponsored, endorsed, sold or Promoted CC Data Ltd. CC Data Ltd make no representations or warranties regarding the advisability of investing in the Product. Past performance of a Product is not an indicator of or a guarantee of future results. YOUR USE OF CCCAGG, AND ANY INFORMATION INCLUDED IN, RELATED TO, OR DERIVED THEREFROM, IS AT YOUR OWN RISK. CC DATA LTD MAKES THE CCCAGG AVAILABLE ON AN “AS IS” BASIS AND EXCLUDES ALL WARRANTIES AND REPRESENTATIONS, EXPRESS AND/OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.
Information current as at 18 August 2022.
About Global X ETFs
Global X ETFs is a leading global ETF provider with a growing range of cost-effective and innovation-led products which are built to help investors and their advisers achieve better investment outcomes. While we are distinguished for our Thematic Growth, Income, and International Access ETFs, we also offer Core, Commodity, and Digital Assets funds to suit a wide range of investment objectives. Explore our ETFs, research, and insights, and more at www.globalxetfs.com.au.
Global X is a member of Mirae Asset Financial Group, a global leader in financial services, with more than US$528 billion in assets under management worldwide.¹ Mirae Asset has an extensive global ETF platform ranging across the US, Australia, Brazil, Canada, Colombia, Europe, Hong Kong, India, Japan, Korea, and Vietnam with almost $100 billion in assets under management.²
¹ Assets under management as at March 2023, Mirae Asset Global Investments
² Assets under management as at June 2023, Mirae Asset Global Investments
Amun Holdings Limited is the parent company of 21Shares AG and Jura Pentium AG (21Shares Group). Jura Pentium AG is the Administrator of the Fund and provides a range of services to the Responsible Entity in relation to the Fund.
The 21Shares Group pioneered the development of physically backed crypto-asset exchange traded products (“ETPs”). Established in 2018, 21Shares AG was the first issuer to create and launch physically backed cryptocurrency exchange traded products.
Since then, the group has gone on to develop and operate the world’s most comprehensive suite of products providing access to cryptocurrencies including more than 20 cryptocurrency ETPs available across Europe on some of the largest regulated markets including Euronext, Xetra and SIX. Funds under management across all exchange traded products issued and operated within the 21Shares Group total approximately US$2.5 billion as at the date of this PDS.
Jura Pentium AG also provides issuance and administration services to third parties looking to gain access to the crypto-ETP space. Both 21Shares and third-party products are operated using Onyx, the proprietary administration software developed and managed by the 21Shares Group.
Jura Pentium AG will provide the administration services to the Responsible Entity and also support the responsible Entity through the provision of high-quality cryptocurrency research.
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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 Global X, 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 3 pm Central European time. We then convert that amount into AUD using the WM/Refinitiv London 4 pm 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 coin entitlement. It is calculated very simply as the total amount of Bitcoin held by EBTC divided by the number of units on issue (less fees and costs).
Bitcoin has been one of the best-performing assets for the past 10 years. Meaning that it may be used as an alpha tilt or side bet in a portfolio. However past performance is not an indication of future performance. Alternatively, a cryptocurrency like Bitcoin is a completely different asset class and uncorrelated to shares, bonds, and commodities like gold, Bitcoin can be bought as a portfolio diversifier.
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The issuer of this product is identified at the top of this page. The PDS and target market determination for the product are available in the Documents section of this listing. Prospective investors should consider the PDS before deciding to acquire the product. This product listing was vetted by and approved by the product issuer identified above before publishing. Investment Markets (Aust) Pty Ltd AFSL 527875 (IM) is not the issuer of the product.
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