The world of Exchange-Traded Funds (ETFs) is about to get a wild new addition: a single product that gives investors exposure to both Bitcoin and gold. This brainchild of Tidal Investments and Quantify Chaos Advisors, called the STKD Bitcoin & Gold ETF, takes a new approach by using both assets for a smooth ride in an often volatile investment environment.
Marrying the Opposites: 100% Win Bet on Split
Traditionally, Bitcoin and gold have been seen as opposing forces in the investment world. Bitcoin, the volatile darling of the cryptocurrency space, is known for its rapid price swings.
Gold, on the other hand, is considered a safe asset – or what many would call “God’s Currency” – which is often sought after during economic downturns due to its perceived stability. The STKD ETF capitalizes on this difference.
Leveraging leverage, the ETF aims to maximize the return of both Bitcoin and gold through a combination of futures contracts and existing ETFs focused on each asset class. This “stacking” strategy, as the listing describes it, essentially combines the performance of both assets together within the ETF.
A new stacked Bitcoin and gold ETF is included
STKD Bitcoin & Gold ETF
ticket and fees
Effective date: Sep 9, 2024Using power, it provides simultaneous exposure to the performance of #Bitcoin and gold with bitcoin futures and ETFs, and gold futures and ETFs.
Sub-Investment Advisor… pic.twitter.com/9GyOYuwqKv
— ETF Hearsay by Henry Jim (@ETFhearsay) June 27, 2024
The underlying theory is that since Bitcoin and gold have historically shown a low correlation – meaning that their prices have not yet moved in tandem – the combined effect will be a stable investment channel.
As of today, the market cap of cryptocurrencies stood at $2.25 trillion. Chart: TradingView.com
Regulatory Barriers Remain
The innovative design of the STKD ETF is attracting attention, but there are still hurdles to clear before it can enter the market. Most important 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 will provide dual exposure to BTC and gold
Investment firms Tidal Investments and Quantify Chaos Advisors recently filed for the STKD Bitcoin & Gold ETF with the US SEC on June 27, according to The Block. This ETF is designed to track…
— CoinNess Global (@CoinnessGL) June 28, 2024
A Sign of Emerging Markets? Bitcoin ETFs Gaining Traction
The STKD ETF proposal comes at a time when Bitcoin ETFs are gaining popularity. The traditional Bitcoin ETF space, which directly tracks the price of Bitcoin, has seen significant inflows in recent weeks. This trend suggests a growing desire among investors for regulated exposure to cryptocurrency.
The success of Bitcoin ETFs paves the way for new products like STKD. It is a sign that the cryptocurrency market is growing and attracting interest from a wide range of investors.
Featured image from TechLog360, chart from TradingView
