A new addition to the world of exchange-traded funds (ETFs) is on the way: a product that will allow investors to invest in both bitcoin and gold. The brainchild of Tidal Investments and Quantify Chaos Advisors, it's called STKD Bitcoin and Gold ETFsIt takes a fresh approach by leveraging both assets for a potentially smoother ride through an often volatile investment landscape.
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Traditionally, bitcoin and gold have been seen as somewhat opposing forces in the investment world. Bitcoin is known for its volatile price fluctuations in the cryptocurrency space.
Gold, on the other hand, is considered a safe-haven asset – or what most would call the “God’s currency” – often sought after during economic downturns due to its perceived stability. STKD ETF It takes advantage of this 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 described in the filing, essentially combines the performance of both assets together within the ETF.
New Stacked Bitcoin and Gold ETF Filed
STKD Bitcoin and Gold ETF
Ticker and fees TBA
Effective Date: September 9, 2024Provides risk for performance simultaneously, using leverage #bitcoin and bitcoin futures and ETFs, and gold via gold futures and ETFs.
Investment Sub-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 exhibited a low correlation – meaning their prices have not moved together – 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 attracting attention, but there are still a few hurdles to cross before it hits the market. The most significant hurdle 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
According to The Block, investment firms Tidal Investments and Quantify Chaos Advisors recently filed for the STKD Bitcoin and Gold ETF with the US SEC on June 27. This ETF is designed in such a way that it…
— Coinness Global (@CoinnessGL) June 28, 2024
Is this a sign of maturing markets? Bitcoin ETFs are on the rise
The STKD ETF proposal comes at a time when bitcoin ETFs are seeing a surge in popularity. Traditional spot bitcoin ETFs, which directly track the price of bitcoin, have seen significant inflows in recent weeks. This trend reflects growing interest among investors for regulated exposure to cryptocurrencies.
The success of the spot bitcoin ETF is paving the way for more innovative products like STKD. This is a sign that the cryptocurrency market is maturing and attracting interest from a wider range of investors.
Featured image from TechLog360, chart from TradingView
