Newly-proposed stacked ETF wants to give investors leveraged exposure to bitcoin and gold

A proposed exchange-traded fund, which filed a prospectus on Thursday, seeks to give traders and investors exposure to both bitcoin and gold without having to buy either asset.

Using leverage, the STKD Bitcoin BTC +0.88% Gold ETF from Tidal Investments and Quantify Chaos Advisors aims to provide simultaneous exposure to the performance of Bitcoin and gold via bitcoin futures and ETFs, as well as gold futures and ETFs.

So, why would someone seek to invest in two assets that have not been historically correlated? The strategy is based on the idea that a combination of investing in a Bitcoin strategy and a gold strategy may provide complementary benefits, according to the preliminary SEC prospectus .

"By blending assets with low correlation, the Fund aims to reduce the impact of short-term market fluctuations on the overall investment outcome, potentially providing a more stable investment trajectory," the filing said.

The ETF will use leverage as it "stacks" the total return of holdings in the fund’s Bitcoin strategy together with the total return of holdings in the fund’s Gold strategy, according to the filing. The ETF will not invest directly in Bitcoin or other digital assets, nor will it invest in or seek direct exposure to the current spot price of Bitcoin, nor will it invest directly in gold or gold bullion.

"Essentially, one dollar invested in the Fund provides approximately one dollar of exposure to the Fund’s Bitcoin strategy and approximately one dollar of exposure to the Fund’s Gold strategy. So, the return of the Gold strategy (minus the cost of financing) is essentially stacked on top of the returns of the Bitcoin strategy (minus the cost of financing)," according to the filing. "The Underlying Funds may gain their exposure to the underlying asset classes either directly, or through the use of derivative instruments, such as futures contracts."

The largest gold ETF by market cap, the SPDR Gold Trust (ticker GLD), is up 12.7% this year. It has a market cap of $62 billion.

Meanwhile, of the spot Bitcoin ETFs that debuted in January, BlackRock's IBIT is leading the pack with a market cap of $116 billion and is up 8.2% year-to-date.

The filing gave the stacked ETF an effective date of Sept. 9, 2024 but did not include a stock ticker or any associated fees.