Bitcoin fund aims to attract New Zealand investors

[ad_1]

A new investment fund specializing in Bitcoin aims to give local investors the ability to add the asset class to their portfolios, without the complexities of direct ownership.

Photo: 123rf

The Vault International Bitcoin Fund is the first of its kind to be established in New Zealand.

It is also the first fund offered by Vault Digital Funds and is reportedly managed by Implemented Investment Solutions, which currently oversees $ 5 billion in assets for local and international investment firms.

The Bitcoin Fund has a market capitalization of around $ 1 million and would invest in international exchange-traded funds (ETFs) that hold positions in bitcoin.

“Our goal at Vault is to provide simple, smart and reliable access to investors seeking well-structured, long-term exposure to digital assets such as bitcoin,” said Vinnie Gardiner, co-founder and CEO of Vault Digital Funds.

He said the fund would be locally owned and operated and aimed to remove barriers for investors interested in digital assets by removing the hassle of ownership.

“The reality has always been that if you own digital assets, you are the custodian of your own portfolio, which poses real risk.”

These included securing your assets online or offline, remembering passwords or worrying about your assets being hacked, he said.

Gardiner knew the latter firsthand, as he was one of the victims of the major hack into Christchurch-based virtual currency exchange Cryptopia in 2019.

He said the fund would remove tax requirements related to direct bitcoin ownership.

“By gaining exposure through a PIE (Portfolio Investment Entity) fund, a well-known investment vehicle, we are eliminating these pain points, while providing easy access to the potential of these digital assets,” Gardiner said.

A PIE structure meant that the fund’s units would be taxed at a fair dividend rate and that any capital gain would be exempt from tax.

However, investors would pay a 5% tax on their dividend income at the prescribed investor rate (PIR), which is capped at 28%, and losses were not deductible.

“This means that most investors pay a maximum of 1.4% in taxes each year, regardless of the performance of the underlying assets,” Gardiner said.

He said bitcoin was incredibly volatile and was not a suitable investment for everyone.

He encouraged anyone considering investing in the asset class to seek financial advice before doing so.

The Bitcoin Fund had previously partnered with the retail trading platforms InvestNow and Easy Crypto, where shares can be purchased by retail investors.

The Managing Director of Easy Crypto, Janine Grainger, is also a co-founder of Vault Digital Funds.

[ad_2]