Tidal Investments has announced a proposal for an actively-managed exchange-traded fund (ETF) that combines investments in bitcoin and gold. This fund aims to provide long-term capital appreciation while mitigating short-term market volatility through dual exposure to these asset classes.
Tidal Looks for SEC Approval for a Leveraged Bitcoin and Gold ETF
The STKD Bitcoin and Gold ETF, managed by Tidal Investments and Quantify Chaos Advisors, seeks to leverage the low correlation between bitcoin (BTC) and gold to create a more stable investment outcome. For every dollar invested, the fund provides approximately one dollar of exposure to bitcoin and one dollar of exposure to gold. This strategy aims to reduce the impact of market fluctuations by balancing the performance of these historically uncorrelated assets.
The fund achieves its investment goals by using U.S.-listed futures contracts and pooled investment vehicles such as exchange-traded products (ETPs). It does not invest directly in bitcoin or gold but instead uses derivative instruments to track their performance. The portfolio includes bitcoin futures, gold futures, underlying funds offering exposure to bitcoin and gold, cash equivalents, and reverse repurchase agreements. By utilizing these instruments, the fund provides leveraged exposure, which can amplify potential returns and risks for investors.
A unique aspect of the STKD Bitcoin and Gold ETF is its use of a wholly-owned Cayman Islands subsidiary to invest in futures contracts and underlying funds. This structure helps manage tax implications and comply with regulatory requirements. Tidal and Quantify Chaos believe the leveraged nature of the fund makes it suitable for those with a higher risk tolerance looking to diversify their portfolios with both digital and traditional assets.
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