Wall Street blends digital gold Bitcoin with physical gold in new ETF filings Wall Street blends digital gold Bitcoin with physical gold in new ETF filings
New ETF trio offers unique blends of Bitcoin, gold, and Ethereum exposure.
2 min read
Updated: Jun. 28, 2024 at 1:08 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Traditional financial institutions are finding new ways to offer investors access to digital assets via exchange-traded funds (ETFs).
On June 27, Henry Jim, an ETF Analyst with Bloomberg Intelligence, reported on three ETF products that would provide investors access to Bitcoin, Gold, Ethereum, and MicroStrategy.
Stacked Bitcoin and Gold ETF
Tidal Investments and Quantify Chaos Advisors have jointly filed a prospectus for a new ETF offering indirect exposure to Bitcoin and Gold.
According to the filing, this ETF will leverage investments to expose investors to both assets without directly purchasing them. It will invest in Bitcoin futures, gold futures, cash, reverse purchase agreements, and other Bitcoin or Gold-related ETFs.
The ETF aims to blend Bitcoin and Gold strategies to offer complementary benefits despite the lack of correlation between these assets. It seeks to minimize short-term market fluctuations and provide stable investment opportunities.
The filing stated:
“The Fund uses leverage to ‘stack’ the total return of holdings in the Fund’s Bitcoin strategy together with the total returns of holdings in the Fund’s Gold strategy. 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.”
MicroStrategy ETF
In other Bitcoin-related ETF news, T-Rex Group, a prominent ETF issuer, has applied to the SEC for funds that will offer investors 2X Long and inverted leveraged positions to MicroStrategy.
Bloomberg’s senior ETF analyst Eric Balchunas noted that if the funds were approved, they would expose investors to about 20 times the typical volatility of the S&P 500. He stated:
“These are a near-lock to be [the] most volatile ETFs ever seen in the US, [and they] will likely be in the neighborhood of 20x the volatility of SPX. The ghost pepper of ETF hot sauce.”
MicroStrategy is the largest corporate holder of Bitcoin, amassing 214,400 BTC, equivalent to more than 1% of the top crypto asset’s total supply. The company’s executive chairman, Michael Saylor, is a vocal BTC advocate who has maintained that the firm will continue with its BTC acquisition.
Ether Option Income Strategy ETF
YieldMax also filed for an ETF that holds spot Ethereum ETFs and sells calls for income. This offers investors indirect exposure to ETH, the second-largest digital asset by market cap.
According to Jim:
“[The ETF will] invest in spot ETH ETFs, sells options on them for the premium. Will have a cap on upside of performance of the underlying Ether ETF.”
Meanwhile, the filing also clarified that the Fund does not invest directly in ETH or other digital assets. It avoids direct investment in derivatives that track ETH performance and does not seek direct exposure to the digital assets’ spot or cash price.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
$3,487.40
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
MicroStrategy
MicroStrategy (Nasdaq: MSTR) is a worldwide leader in enterprise analytics and mobility software.
Michael Saylor is the Executive Chairman, founder, and principal shareholder of MicroStrategy.
Eric Balchunas is an American author, ETF analyst, and Senior ETF Analyst at Bloomberg Intelligence.