Investors Flock to Bitcoin and Gold Amid Escalating Geopolitical Tensions
STKD, or Stacked, has officially launched its Bitcoin & Gold ETF, BTGD. This is a fund that provides leveraged exposure to both Bitcoin and gold-two investments currently finding their niches as safe havens in periods of economic turmoil. With inflation and geopolitical risks in a rising profile, especially going into US presidential elections, this ETF positions itself to take full advantage of what it sees as a heightened “debasement trade.” In other words, the course of investment that seeks protection from further erosion in portfolio value caused by inflation, high government deficits, and global tensions.
Fund Structure and Strategy
The STKD Bitcoin & Gold ETF offers diversification with equal measures of Bitcoin and gold in each dollar invested. That is, with every dollar of investment, an investor gets a dollar of exposure to Bitcoin and a dollar of exposure to a portfolio of gold. This happens through a mix of ETFs and futures contracts, hedging against positions yet opening up avenues for growth. In the derivatives market, futures contracts, which are agreements for the purchase or sale of an asset on a predetermined future date, help provide the investors with flexibility in managing the risks while still having exposure to the assets.
Why Bitcoin and Gold Gain Traction
According to a report by JPMorgan dated Oct. 3, many investors move towards Bitcoin and gold as they prepared for possible economic shocks. Investors are feeling the pressure to find safe havens for value amidst rising geopolitical tensions and growing concerns over long-term inflation, courtesy of major government deficits. Bitcoin has increasingly been in the spotlight, tagged “digital gold,” accompanying the top slot traditionally held by gold investments. This, JPMorgan’s report further comments, is set to drive the “debasement trade” as more people seek out assets capable of withstanding economic volatility.
A Hybrid Strategy for Risk Management
This combination of Bitcoin and gold offers investors an unrivaled opportunity to diversify their portfolios. On the one hand, Bitcoin has the promising potential for huge growth; on the other, gold is a safe-haven asset. Combining these two, STKD tries to lure in both the risk-tolerant investor and the investor looking for a more balanced hedge against possible downturns.
Demand for Cryptocurrency ETFs Increasing
This also happened to be the week when the STKD ETF finally made an appearance, in the wake of a more general proliferation of crypto-linked ETFs. Other asset managers, such as Canary Capital and Bitwise, are getting ready to launch their own cryptocurrency ETFs, including those on XRP and Litecoin. The trend reflects a growing taste for cryptocurrency investments in light of the ongoing turmoil in traditional markets.
