TL;DR
- Innovation in Exposure: Launching in September, STKD offers a novel approach for investors seeking combined exposure to Bitcoin and Gold. It achieves this by leveraging futures contracts and existing ETFs linked to these assets, instead of directly owning them.
- Diversification and Stability: The ETF combines Bitcoin, known as “Digital Gold” for its value-holding potential, with traditional Gold, a long-standing safe-haven asset. This targets diversification across historically uncorrelated assets.
- Building on Existing ETFs: The STKD ETF leverages established financial instruments. This means it won’t directly hold Bitcoin, Gold, or other digital assets, but instead uses existing ETFs and futures contracts to provide exposure to their returns.
Quantify Chaos Advisors and Tidal Investments have collaborated to submit a proposal for a groundbreaking new exchange-traded fund (ETF) that connects Bitcoin and Gold. The STKD Bitcoin & Gold ETF is designed to offer investors a way to invest in both assets without the need for direct ownership.
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 STKD ETF leverages a unique strategy, combining Bitcoin and Gold exposure through BTC futures and ETFs, as well as Gold futures and ETFs. By doing so, it offers investors a diversified approach to two distinct asset classes.
Bitcoin: Digital Gold and Volatility
Bitcoin has emerged as the “Digital Gold” over the years, gaining recognition as a store of value within the crypto community. Despite its higher returns compared to Gold over the past decade, Bitcoin remains highly volatile. Investors seeking stability often turn to Gold, which has a long history as a safe-haven asset.
Quantify Chaos Advisors’ preliminary filing highlights the complementary benefits of blending Bitcoin and Gold strategies. By combining assets with low correlation, the ETF aims to mitigate the impact of short-term market fluctuations. This approach could provide a more stable investment trajectory for investors.
How the Bitcoin and Gold ETF Works
The STKD ETF employs leverage to combine the total return of its Bitcoin strategy holdings with the total return of its Gold strategy holdings. It’s important to mention that the ETF doesn’t invest directly in Bitcoin, other digital assets, or physical Gold. Instead, it seeks exposure through futures contracts and ETFs.
Essentially, every dollar invested in the fund provides approximately one dollar of exposure to both the Bitcoin and Gold strategies. The Gold strategy’s return (minus financing costs) is stacked on top of the Bitcoin strategy’s returns (minus financing costs).
Existing Players
The SPDR Gold Trust (GLD) currently holds the title of the largest Gold ETF, boasting a market cap of $62 billion. Since the start of the year, it has delivered a respectable 12.7% return.
Meanwhile, the spot Bitcoin ETF made its debut earlier this year, with BlackRock’s IBIT leading the way. IBIT, with a market cap of $116 billion, has gained 8.2% year-to-date, solidifying its position as an industry leader.
Investors eagerly await the release of the STKD Bitcoin & Gold ETF in September, anticipating the unique blend of these two valuable assets in a single investment vehicle.
