The world of Exchange-Traded Funds (ETFs) is about to get a wild new addition: a single product offering investors exposure to both Bitcoin and gold. This brainchild of Tidal Investments and Quantify Chaos Advisors, called the STKD Bitcoin & Gold ETF, takes a novel approach by leveraging both assets for a potentially smoother ride in the often-choppy investment landscape.
Marrying Opposites: A 100% Leveraged Bet On Diversification
Traditionally, Bitcoin and gold have been seen as somewhat opposing forces in the investment world. Bitcoin, the volatile darling of the cryptocurrency scene, is known for its rapid price swings.
Gold, on the other hand, is considered a safe-haven asset – or what most would say “God’s Currency” – often sought after during economic downturns due to its perceived stability. The STKD ETF capitalizes on this very difference.
By using leverage, the ETF aims to amplify the returns of both Bitcoin and gold through a combination of futures contracts and existing ETFs focused on each asset class. This “stacking” strategy, as the filing describes it, essentially ties the performance of both assets together within the ETF.
New stacked Bitcoin and gold ETF filed
STKD Bitcoin & Gold ETF
ticker and fees tba
effective date: Sep 9, 2024Using leverage, provides simultaneously exposure to performance of #Bitcoin and gold via bitcoin futures and ETFs, and gold futures and ETFs.
Investment Sub-Adviser… pic.twitter.com/9GyOYuwqKv
— ETF Hearsay by Henry Jim (@ETFhearsay) June 27, 2024
The underlying theory is that since Bitcoin and gold have historically exhibited low correlation – meaning their prices haven’t moved in tandem – the combined effect will be a more stable investment trajectory.
As of today, the market cap of cryptocurrencies stood at $2.25 trillion. Chart: TradingView.com
Regulatory Hurdles Remain
The innovative design of the STKD ETF is certainly grabbing attention, but there are still hurdles to clear before it can hit the market. The most significant one is regulatory approval from the US Securities and Exchange Commission. The SEC has historically been cautious about approving Bitcoin ETFs, citing concerns about market manipulation and volatility.
Tidal Investments and Quantify Chaos’ ETF to offer dual exposure to BTC and gold
Investment firms Tidal Investments and Quantify Chaos Advisors recently filed for the STKD Bitcoin & Gold ETF with the U.S. SEC on June 27, according to The Block. This ETF is designed to track the…
— CoinNess Global (@CoinnessGL) June 28, 2024
A Sign Of Maturing Markets? Bitcoin ETFs Gain Traction
The STKD ETF proposal comes at a time when Bitcoin ETFs are experiencing a surge in popularity. Traditional spot Bitcoin ETFs, which track the price of Bitcoin directly, have seen significant inflows in recent weeks. This trend suggests a growing appetite among investors for regulated exposure to the cryptocurrency.
The success of spot Bitcoin ETFs is paving the way for more innovative products like the STKD. It’s a sign that the cryptocurrency market is maturing and attracting interest from a wider range of investors.
Featured image from TechLog360, chart from TradingView
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