New Simplify ETF Has Bitcoin Sleeve

May 25, 2021

Today, Simplify launched an actively managed ETF that combines exposure to a portfolio of U.S. stocks with an allocation to bitcoin. The Simplify US Equity PLUS GBTC ETF (SPBC) can invest directly in U.S. stocks or get exposure to the asset class through ETFs or futures contracts. Meanwhile, it accesses bitcoin through the Grayscale Bitcoin Trust (GBTC), which it holds via a Cayman Islands subsidiary.

SPBC comes with an expense ratio of 0.50% and lists on the Nasdaq stock exchange.

Simplify focuses on offering strategies to retail investors that are normally only available at the institutional level. SPBC continues this trend by providing investors with a way to access bitcoin such that their allocation to the cryptocurrency is regularly rebalanced. Given the volatility of bitcoin, the costs of rebalancing back to a target allocation can be prohibitive for small investors, notes Michael Green, Simplify’s chief strategist.

“It literally gives an advisor the tools to say to their clients, ‘If you want crypto exposure, here’s how we can do it,’” said Green.

He notes that SPBC will generally provide exposure to the S&P 500 via other ETFs, with the allocation to GBTC rebalanced on a quarterly basis. The objective is to generally maintain an exposure to bitcoin between 10% and 15%.

“As crypto is rising in price, you’re reallocating into the S&P 500, which is a much lower volatility asset,” Green said.  

He further notes that since the rebalancing transactions occur within the ETF wrapper, they don’t create taxable events for investors.

Contact Heather Bell at [email protected]

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