What is Bitcoin?
Bitcoin is a digital asset that operates independently of central banks or governments. Unlike sovereign currencies such as the NZ dollar that are backed by central bank and government authority, Bitcoin relies on peer-to-peer software and cryptography (a technological data protection method) to maintain its integrity. The network software protocols ensure that each Bitcoin (or portion of) has a unique identity that cannot be copied. Under a so-called ‘mining’ process, new Bitcoins are created by computers solving complex mathematical puzzles: however, the total supply of Bitcoin will ultimately be limited to 21 million. Bitcoin transactions are stored on a global network of computers via a verification and recording process called blockchain – or distributed ledger technology. Blockchain establishes a ‘single version of truth’ where all users can see and agree on who owns each Bitcoin at any point in time.
Given the Underlying Funds invest in Bitcoin, the price of Bitcoin will be a key factor influencing the performance of the Fund.
This is a highly speculative investment. Bitcoin is a highly volatile asset. This means the Fund will not be appropriate for all investors.