The first fund to offer bitcoin investment as part of a bespoke portfolio has launched on global derivatives trading platform IG, the UK's largest forex provider.
Launched in late 2014, funding platform Invest Your Way (IYW) will enable traders to invest in bitcoin via contract for differences (CFDs), a form of futures contract where trades are settled in cash as opposed to physical goods.
In this case, the CFD will mimic bitcoin – the underlying asset – providing returns based on the digital currency's price.
IYW CEO Michael Newell told CoinDesk:
"We actively work with clients to expand this range and the most highly requested product since launch has been bitcoin. Many people are aware of what they are, yet few know how to access them [bitcoin]. Fewer still would have any idea how to build bitcoin into a diversified portfolio."
He continued: "In response to this demand we have worked to bring a solution to market that allows for exposure to bitcoin as part of a balanced and managed portfolio. "
Risk management
According to Newell, client funds are stored in a fully segregated UK bank account and IG, the broker, sources bitcoin from a variety of providers to offset risk.
"IG manages its risk appropriately with bitcoin as they do with every other asset class, and runs its platform with its own set of due diligence and risk criteria," said the CEO.
He continued:
"Bitcoin is still a relatively new product and the value of them can be quite volatile. To ensure that this risk is managed appropriately, InvestYourWay will only include Bitcoin as one holding within a diversified fund, thereby reducing exposure and managing risk. "
IYW will only offer the bitcoin option to those clients who are able to demonstrate sufficient investment experience.
A spokesperson for IG confirmed the partnership, stating that it provided the underlying infrastructure which enabled it to format the investment product and "securely hold their client money in segregated accounts in line with FCA regulatory requirements".
Disclaimer: This article should not be viewed as an endorsement of any of the services mentioned. Please do your own research before considering investing any funds via these services.
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