In a recent episode of Behind the Ticker, David Dziekanski, founder and CEO of Quantify Funds, introduced his firm’s first ETF, the STKD Bitcoin and Gold ETF (ticker: BTGD). With 17 years of experience in the investment and ETF industry, including 11 years as a partner at Tidal Financial Group, Dziekanski launched Quantify Funds to bring innovative, efficient investment solutions to market. BTGD represents a novel approach to leverage ETFs, offering exposure to both Bitcoin and gold in a single investment vehicle.
BTGD is structured as a “stacked” ETF, providing $1 of exposure to Bitcoin and $1 of exposure to gold for every $1 invested. This 50-50 blend offers a leveraged, long-term approach without the typical path dependency or decay associated with traditional leverage products. The fund utilizes a combination of futures and exchange-traded products to optimize leverage and manage rebalancing efficiently. Dziekanski explained that the fund targets a 5-7% rebalance drift to minimize trading costs while maintaining the desired asset allocation.
The rationale behind combining Bitcoin and gold lies in their shared status as scarcity assets. Gold, with its historical role as a store of value, and Bitcoin, often referred to as “digital gold,” both offer protection against currency debasement. Dziekanski noted that the mining rates of Bitcoin (0.86% annually) and gold (1.75% annually) are significantly lower than the 7-9% annual currency printing rates of developed nations, making them ideal assets for a hedge against inflation and declining currency values.
Dziekanski also highlighted how the differing volatility and correlations of Bitcoin and gold enhance the portfolio’s resilience. Bitcoin’s higher volatility is balanced by gold’s stability, allowing for effective rebalancing during market shifts. Historical data shows that gold has performed well during past crypto winters, providing diversification benefits and mitigating drawdowns. Advisors are encouraged to view BTGD as a debasement hedge or a high-volatility alternative in portfolios, with suggested allocations ranging from 2-5%.
