Fund issuer Stacked, also known as STKD, has launched an exchange-traded fund (ETF) touting leveraged exposure to Bitcoin (BTC) and gold as investors embrace the so-called “debasement trade” ahead of the United States presidential elections in November.
According to the Oct. 16 announcement, STKD Bitcoin & Gold ETF (BTGD) aims to offer investors “the opportunity to invest in two scarcity assets that may protect against future inflation and currency debasement.”
The actively managed ETF is designed to deliver $1 of exposure to BTC and $1 to a gold portfolio for every $1 put into the fund. It intends to hold a mix of ETFs and futures tied to the price of BTC and gold.
Futures contracts are standardized agreements to buy or sell an underlying asset at a future date.
Source: JPMorgan
Related: Geopolitical tensions, US elections favor Bitcoin ‘debasement trade’: JPMorgan
Investors are turning to BTC and gold as they brace for a “catastrophic scenario” amid rising geopolitical tensions, according to an Oct. 3 report by JPMorgan.
“[R]ising geopolitical tensions and the coming [United States] election are likely to reinforce the ‘debasement trade’ thus favoring both gold and Bitcoin,” according to the report, which JPMorgan shared with Cointelegraph.
The so-called debasement trade refers to a spike in gold demand caused by factors ranging from “structurally higher geopolitical uncertainty since 2022, to persistent high uncertainty about the longer-term inflation backdrop, to concerns about […] persistently high government deficits across major economies,” among others, JPMorgan said.
STKD further explained the strategy:
“[O]ne of the more heavily debated narratives has been that of ‘bitcoin vs. gold’… but a discussion built on ‘versus’ misses the larger role that both assets can play for those investors looking for a mix of capital appreciation and portfolio hedging.”
Source: Eric Balchunas
STKD’s product launch comes amid a proliferation of proposed ETFs holding cryptocurrencies ahead of the US presidential election in November.
In October, asset manager Canary Capital tipped plans to launch ETFs holding XRP and Litecoin (LTC). Bitwise also plans to launch an XRP ETF.
Meanwhile, leveraged MicroStrategy ETFs broke $400 million in net assets this week as retail investors pour into ultra-volatile BTC plays, according to data from Bloomberg Intelligence.
Leveraged ETFs add additional risk and tend to underperform due to the costs of daily rebalances to maintain a leverage target.
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