The Vault International Bitcoin Fund (VIBF) offers New Zealand investors a unique way to gain exposure to Bitcoin without directly managing digital wallets or navigating overseas exchanges. Launched in October 2021, it’s the first locally registered fund in New Zealand dedicated entirely to Bitcoin investments. This comprehensive review explores its structure, fees, risks, tax benefits, and how it compares to alternative ways of investing in Bitcoin.
Whether you're considering your first step into cryptocurrency or evaluating safer, regulated options, this guide delivers clear, objective insights to support informed decision-making.
👉 Discover how managed crypto funds simplify Bitcoin investing — explore your options today.
Understanding the Vault International Bitcoin Fund
The Vault International Bitcoin Fund (VIBF) allows investors to access Bitcoin’s price movements through a New Zealand-dollar-denominated investment fund. Instead of buying and storing Bitcoin yourself on an exchange, you invest in a professionally managed fund that holds Bitcoin-related assets.
VIBF is listed exclusively on InvestNow, one of New Zealand’s leading investment platforms. It is not available for direct purchase through Vault Digital Funds Limited. However, Vault has indicated plans to expand availability to Easy Crypto, a popular local crypto exchange.
The fund invests indirectly in Bitcoin by allocating capital across four established global funds and ETFs:
- Grayscale Bitcoin Trust (US)
- CI Galaxy Bitcoin ETF (Canada)
- 3IQ Coinshares Bitcoin ETF (Canada)
- Purpose Bitcoin ETF (Canada)
This diversified approach leverages proven vehicles with strong custody practices, reducing the operational complexity for individual investors.
Fees, Minimum Investment & Key Details
Understanding the cost structure is essential when evaluating any investment. Here's what you need to know about VIBF:
Management and Transaction Fees
- Annual management fee: 2.50%
- Buy/sell spread fee: 0.25% (charged per transaction)
While these fees may appear high compared to traditional index funds, they are typical for cryptocurrency-focused products due to the complexity of custody, compliance, and cross-border asset management.
Minimum Investment Requirements
- Initial investment via InvestNow: $250
- Additional contributions: $50
(Note: Vault’s official documents list higher thresholds — $1,000 initial and $500 additional — but InvestNow allows lower entry points.)
Withdrawals
Investors can redeem their units at any time. Funds are typically processed within five business days of the redemption request.
Tax Structure: PIE Fund Advantages
One of VIBF’s standout features is its status as a Prescribed Investment Entity (PIE). This means:
- Returns are taxed at your Prescribed Investor Rate (PIR): 10.5%, 17.5%, or 28%, based on your income.
- No separate capital gains tax applies.
- Under the Fair Dividend Rate (FDR) rules, tax is calculated annually on deemed income — even if the fund didn’t distribute cash or if the asset value declined.
👉 Learn how tax-efficient investment structures can impact your returns — see current opportunities.
Pros and Cons of Investing in VIBF
✅ Advantages
1. NZD-Denominated Investment
You invest and track performance in New Zealand dollars, eliminating the need to manage foreign currency conversions manually.
2. Simplified Access to Global Bitcoin ETFs
The underlying assets — such as Grayscale and Purpose Bitcoin ETFs — are listed in the US and Canada. Most Kiwi investors can’t easily access these markets. VIBF removes that barrier.
3. Enhanced Security and Custody
Unlike self-custody wallets where lost keys mean lost funds, VIBF handles security through trusted custodians like Coinbase Custody, significantly reducing personal risk.
4. Tax Efficiency
As a PIE fund, VIBF offers favorable tax treatment compared to direct crypto ownership, especially for higher-income earners who would otherwise face higher marginal rates.
5. Lower Effective Costs Than DIY Crypto Trading
When factoring in exchange fees, network charges, and FX spreads, buying Bitcoin directly can exceed 1% in transaction costs. VIBF bundles these into a transparent fee model.
❌ Drawbacks
1. High Ongoing Fees
At 2.50% per annum, the management fee is steep relative to traditional funds. While common for crypto products, it can erode long-term returns.
2. Market Hours Restriction
Unlike real-time crypto trading (available 24/7), VIBF trades only during market hours. You cannot react instantly to sudden price swings.
3. Full Exposure to Bitcoin Volatility
The fund holds only Bitcoin-linked assets — there’s no diversification into other cryptocurrencies or asset classes. This makes it highly speculative.
Risks You Should Know
Vault clearly labels VIBF as a "highly speculative investment" with a risk rating of 7 out of 7 in its Product Disclosure Statement (PDS).
Key risks include:
- Extreme price volatility: Bitcoin has seen swings of ±10% in a single week.
- Currency risk: The fund is not hedged against NZD/USD or NZD/CAD fluctuations.
- Security threats: Although custodians use cold storage, digital assets remain vulnerable to systemic breaches.
- Regulatory uncertainty: Cryptocurrency regulations are evolving globally and could impact valuations.
Past performance — including gains exceeding 7,000% over five years ending 2021 — does not guarantee future results.
How Does VIBF Compare to Other Bitcoin Investment Options?
1. Buying Bitcoin Directly
Platforms like Easy Crypto allow instant purchases in NZD with full ownership. You control your private keys and can trade anytime. However, this requires technical knowledge and carries custody risks.
2. Bitcoin Futures ETFs (e.g., ProShares BITO)
These funds track Bitcoin futures contracts rather than actual Bitcoin. They often underperform spot prices due to "roll yield drag" and lack direct asset backing.
3. Direct Investment in Overseas Bitcoin ETFs
Options like Grayscale’s GBTC offer exposure but come with higher premiums or discounts to net asset value and require USD accounts and international brokerage access (e.g., Interactive Brokers).
👉 Compare global crypto investment strategies — find the right fit for your portfolio.
Frequently Asked Questions
Is the Vault International Bitcoin Fund a currency or an investment?
It's an investment vehicle designed to track Bitcoin’s price performance. While Bitcoin functions as digital currency, investing via VIBF is a financial speculation on its future value — not a payment method.
How does NZD exchange rate movement affect my investment?
Since the fund isn’t currency-hedged, changes in the NZD’s strength against USD or CAD will impact your returns when converted back to NZD. However, due to Bitcoin’s high volatility, FX movements are often minor in comparison.
Can I sell my VIBF units instantly if the market crashes?
No. Redemptions occur only during standard trading hours and take up to five business days to settle. This makes VIBF better suited for long-term investors rather than short-term traders.
Is VIBF suitable for beginners?
Yes — especially for those wary of managing wallets or navigating complex exchanges. The PIE structure and professional custody make it more accessible than direct ownership.
Does VIBF pay dividends?
No. The fund does not generate income like dividend-paying stocks. Returns depend solely on capital appreciation of its underlying assets.
What happens if Vault Digital Funds goes out of business?
Your investment remains protected because assets are held separately by custodians (like Coinbase). Even if Vault ceases operations, the underlying holdings still belong to investors.
Final Thoughts: Who Should Consider VIBF?
The Vault International Bitcoin Fund fills a niche for New Zealand investors seeking regulated, tax-efficient exposure to Bitcoin without technical overhead.
It’s best suited for:
- Long-term investors comfortable with high volatility.
- Those unfamiliar with crypto wallets or international trading.
- Higher-income earners benefiting from PIE tax advantages.
However, the 2.50% annual fee and trading limitations mean active traders or cost-sensitive investors may prefer alternatives.
As with any cryptocurrency investment, never allocate more than you can afford to lose.
Core Keywords:
Bitcoin investment New Zealand, Vault International Bitcoin Fund, VIBF review, cryptocurrency fund NZ, PIE fund Bitcoin, InvestNow Bitcoin, Bitcoin ETF alternative