Are you part of the Bitcoin Generation?
6 min read
At Oval we want to provide the kind of investments that our users truly believe can build them a financial future. We have listened to the many of you who have asked to introduce Bitcoin. To get this to you in the fastest and most secure way possible, we have decided to launch Bitcoin Generation, a new ETN indexed on the value of the Purpose Bitcoin ETF.
Bitcoin: the king of cryptocurrencies
Bitcoin is the first widely circulated cryptocurrency created in 2008 by Satoshi Nakamoto, whose identity is still unknown today: individual or collective of people? The inventor based this new monetary technology on the blockchain, also invented by him, which literally means "chain of blocks". It is an immutable digital register in which the data is grouped into blocks linked in chronological order.
The structure of the blockchain is similar to that of bank ledgers and was created for this very purpose. In fact, it is the register that contains all the Bitcoin transactions carried out since the birth of the cryptocurrency, as a sort of DNA.
Bitcoin is a decentralized digital currency that is not tied to banks, governments nor institutions, and its strength lies in allowing peer-to-peer transactions without intermediaries, controlled by an Internet protocol.
The maximum amount of Bitcoin that can ever be produced was limited to 21 million by the creator himself. To date, 900 Bitcoins are produced per day and over 18 million coins are already in circulation: this means that more than 88% of the 21 million have already been mined. When will the last Bitcoin be mined? Probably around 2140, but it's hard to know for sure.
Investing in Bitcoin
Investing in Bitcoin is not like investing on the stock market. When you buy Bitcoin you also have to manage the way you store this asset as it is quite risky to hold. There are usually two ways to hold Bitcoin: in “custodial” virtual wallets, held for you by the Exchanges, platforms accessed through the Internet where you can buy and sell cryptocurrencies, and in “non-custodial” wallets where you actually are the owner of your digital money and you can store your private key to access your Bitcoin offline, without being connected to the Internet. This second option is much safer but requires more planning, knowledge, and investment in the right tool and makes more sense if you hold large amounts.
Many of you aim to invest in a product related to Bitcoin in the Oval way: investing small amounts on a recurring basis over a long period of time.
This is why we have decided to give you the opportunity to invest, through our usual ETN certificates, on the basis of an ETF on Bitcoin.
What is an ETF on Bitcoin?
First of all, an ETF is an Exchange Traded Fund, a security listed on a stock exchange that gives you the opportunity to follow the performance of certain underlyings: usually an index of shares, but also of certain assets. In this case, Bitcoin ETFs allow you to buy a piece of the fund that tracks Bitcoin. The first to be approved is a Canadian Bitcoin ETF, issued by Purpose Investments under the ticker BTCC.U, making it the very first physically settled Bitcoin ETF available to investors that does not require any digital wallet or key.
How does the product on Oval marketplace work?
We have decided to launch Bitcoin Generation on Oval only for European Customers. Similar to Silver Bullet and Gold Rush, they are ETN certificates that give you the opportunity to follow the performance of the underlying, the Purpose Investments Bitcoin ETF in this case, hedged in Euro. This means that even if the US dollar changes its price in relation to the Euro will not bear the currency risk.
You asked and we listened! But not only that, we believe there is a true opportunity now.
We talk about a Bitcoin Generation because it’s no secret that cryptocurrencies are here to stay, and will have an ever-growing impact on the way we exchange money around the world. This shift in the economy is already happening. Cryptocurrencies, in particular Bitcoin, are already leading to new approaches and mindsets about markets and the economy, and will stay around for generations.
This product, Bitcoin Generation, follows the trend of the world's first Bitcoin ETF, launched in February 2021 by a Canadian asset manager, which in turn allows investors simplified access to cryptocurrency without the risk of a digital wallet.
Another reason? Oval is finally a tax withholding agent for Italian fiscal residents. By choosing the Administered by Oval tax regime, Oval will be the one to handle the payment and declaration of any taxes that have to be paid on Bitcoin Generation and other investments on Oval for 2021. Also, unlike for ETFs, any losses on investments in this ETN product can compensate for the gains on others, reducing the tax burden for you.
How can I invest?
You can find Bitcoin Generation in the Invest section of the app. Here you can decide to start investing from just €10 and set up minimum increments of €1, like all other products. Given the underlying, the product has 2% entry and exit fees that help us cover the exchange rate risk to Euro, and a 2% management fee, our usual 1% for Oval and another 1% that goes directly to the ETF manufacturer, Purpose Investments.
Investing like an Ovaler?
Unlike other investment platforms, we have chosen to avoid fixed fees on this asset, as with our other products, so that you can continue to invest with small amounts and on a recurring basis.
This means that, in terms of entry or exit fees, it costs the same for you to invest your €100 in one go (2% corresponds to €2), or split the €100 into 10 different investments of €10 each (€0.20 each time, for 10 times, is €2).
This mechanism sits at the heart of the way we devised Oval, giving everyone the opportunity to become a long term investor. Our app is designed to help you buy and hold over time, whilst still giving you the liquidity to exit when you want. As always your orders will be executed at the end of day price, so it is not the right place to do trading intra day.
We hope this new product can enrich your diversification strategy, for your financial well-being. With Bitcoin Generation we add another piece to our growing marketplace of financial products, allowing everyone to choose the best mix for them.
Who is this investment for?
Bitcoin Generation is currently only available for EU residents. Like always we want to remind you that this investment is not for everyone. This ETN is designed for retail investors with moderate experience of financial markets. They have a medium term investment horizon and are looking for an investment opportunity that reflects an expectation that the underlying will increase in value over time and are able to bear a total loss of the amount invested.
Bitcoin Generation has an early redemption event, that if the product loses more than 80% of its initial value, you will get back at least 10% of your capital based on the effective price at closure.
Although it has been a good market with overall positive performances, with cost averaging and by investing regularly and in a recurring manner you are not timing the market and you are avoiding thinking about the daily fluctuations movements which may create bad investment decisions. We always mention that Oval investments are for the long run, so our approach is to buy and hold, knowing you can take your money out any time at a cost.
Are you part of the Bitcoin Generation?
Oval Marketplace does not provide investment advice and individual investors should make their own decisions. Seek the advice of a financial consultant if you are not sure about your investment. Please consider that cryptocurrencies are subject to high volatility, your capital is at risk and the value of investments can go up as well as down and you may receive back less than your original investment: you should not invest money that you can’t afford to lose.
How precious can your investment be?
Invest with Creative Thinking: taking a closer look