An incredible new addition is about to enter the world of exchange-traded funds (ETFs) – a single product that gives investors exposure to both Bitcoin and gold. The brainchild of Tidal Investments and Quantify Chaos Advisors, the STKD Bitcoin & Gold ETF takes a novel approach by leveraging both assets to make investing smoother during a often volatile investment environment.
Merging opposites: a 100% leveraged diversification bet
Traditionally, bitcoin and gold have been viewed as somewhat opposing forces in the investment world, with bitcoin, the volatile darling of the cryptocurrency world, known for its wild price fluctuations.
Gold, on the other hand, is considered a safe haven asset, or “God’s currency,” and is often sought after during economic downturns due to its stability. The STKD ETF takes advantage of exactly this difference.
The ETF aims to amplify returns on both Bitcoin and gold by using leverage to combine futures contracts with existing ETFs focused on each asset class. As described in the filing, this “stacking” strategy essentially ties the performance of both assets within the ETF.
New Bitcoin and Gold ETF Filed
STKD Bitcoin & Gold ETF
Ticker and fees yet to be determined
Effective date: September 9, 2024Using leverage gives you exposure to performance at the same time #Bitcoin Invest in gold through Bitcoin futures and ETFs, and gold futures and ETFs.
Investment Sub-Advisor… pic.twitter.com/9GyOYuwqKv
— Henry Jim, ETF Hearsay (@ETFhearsay) June 27, 2024
The underlying theory is that because Bitcoin and gold have historically had low correlation (i.e., their prices have not moved in tandem), their synergistic effect makes for a more stable investment trajectory.
As of today, the market cap of cryptocurrencies stood at $2.25 trillion. Chart: TradingView.com
Regulatory hurdles remain
While the STKD ETF’s innovative design has certainly attracted attention, there are still hurdles it must clear before it can hit the market, most importantly regulatory approval from the U.S. Securities and Exchange Commission. The SEC has previously been cautious about approving a Bitcoin ETF, citing concerns about market manipulation and volatility.
Tidal Investments and Quantify Chaos ETF Offers Dual Exposure to BTC and Gold
According to The Block, investment firms Tidal Investments and Quantify Chaos Advisors recently filed the STKD Bitcoin & Gold ETF with the U.S. SEC on June 27. The ETF is…
— Coinness Global (@CoinnessGL) June 28, 2024
Sign of market maturity? Bitcoin ETFs gaining momentum
The STKD ETF proposal comes at a time when Bitcoin ETFs are experiencing a surge in popularity. Traditional spot Bitcoin ETFs, which directly track the price of Bitcoin, have seen heavy inflows in recent weeks, a trend that suggests growing investor interest in gaining exposure to regulated cryptocurrencies.
The success of the Spot Bitcoin ETF paves the way for more innovative products like STKD, a sign that the cryptocurrency market is maturing and attracting wider investor interest.
Featured image from TechLog360, chart from TradingView
