Asset manager Quantify Funds on Wednesday debuted a fund offering investors a novel way to gain exposure to both bitcoin and gold, according to a press release.

The actively managed STKD Bitcoin & Gold ETF​ (BTGD) seeks to provide 100% exposure to both bitcoin and gold for every $1 invested. The fund aims to achieve this by investing in bitcoin and gold futures contracts as well as exchange-traded products focused on those assets.

To provide the dual exposure, BTDG, which has a 1% expense ratio, uses leverage to essentially double each dollar invested, according to the fund prospectus.

“If the Fund has $100 in assets, the Fund expects to achieve $100 of exposure to the Bitcoin strategy and $100 of exposure to the Gold strategy. This is akin to investing $100 in a bitcoin strategy fund, borrowing $100, and putting the borrowed $100 in a gold strategy fund," the fund prospectus said.

The fund's introduction comes as bitcoin, the largest cryptocurrency by market value, and gold's price have risen in recent weeks. Bitcoin topped $68,000 earlier this week, its highest level since July. It is up about 50% year-to-date. Gold set an all-time high earlier this year and is up 27% in 2024. BTGD also reflects issuers' growing efforts to address strong demand for crypto-focused assets after the wildly successful performance of spot bitcoin ETFs earlier this year.

BTGD, which has a 1% expense ratio, will not directly hold bitcoin or gold, according to the fund's prospectus.

Bitcoin and Gold ETF Strategy

BTGD will not directly hold bitcoin or physical gold.

The fund may also invest in reverse repurchase agreements, which are a form of borrowing where the fund sells portfolio securities to financial institutions and agrees to repurchase them at a later date for a higher price, according to the prospectus. This arrangement allows the fund to use the proceeds from the initial sale for other investment purposes.

BTGD is managed by Tidal Investments as the advisor and Quantify Chaos Advisors, as the sub-advisor, the prospectus notes. The funds' portfolio managers reallocate holdings at least monthly to maintain the balanced exposure to bitcoin and gold.

Quantify noted that the fund's strategy involves risks associated with holding both bitcoin and gold investments, including price volatility, regulatory uncertainty, and potential security issues with trading platforms. As a non-diversified fund, BTGD may be more susceptible to losses from adverse events affecting bitcoin or gold markets.

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