In this paper we look at the criteria for index selection in a spot bitcoin ETP, with particular focus on the timing of the index. In a recent article, CF Benchmarks have analysed the suitability of the CME CF Bitcoin Reference Rate (BRR) for the creation of regulated products and more recently performed analysis comparing this to a Sydney-based time period. We draw on that analysis in this paper and expand on it in the context of the impact on the performance, costs and market dynamics when used in a passive bitcoin ETP.
Attention has recently been given to the addition of non-traditional investments such as bitcoin in SMSF portfolios. Before doing so, SMSF trustees should take steps to understand the asset class and most importantly obtain professional advice on how they can safely implement digital assets into portfolios to ensure they meet all their fiduciary obligations as SMSF trustees and that no issues arise during annual audits.
One of the most common criticisms of Bitcoin I hear is that it sounds like a cult or religion. I believe that the religious element of Bitcoin is a feature, not a bug. In fact, I would say the single final financial backstop that gives Bitcoin “value” is its religious adherents. To begin, however, we need to understand what religion means in the context of the True Bitcoin Believer.