Janice R. Andrews
In recent times, investors have increasingly gravitated toward alternative assets like gold and Bitcoin. Despite the stock market reaching new heights in 2024, both gold and Bitcoin have outperformed other investments, drawing substantial interest from those seeking security and high returns.
Gold, known as a safe haven, and Bitcoin, often referred to as “digital gold,” have become favored investment options amid geopolitical instability and economic unpredictability. As a result, asset management firms are bundling these two assets into innovative financial products, allowing investors exposure to both.
New Funds Offering Exposure to Gold and Bitcoin
Two key exchange-traded funds (ETFs) now offer investors the chance to invest in both gold and Bitcoin. Quantify Funds recently introduced the STKD Bitcoin & Gold ETF, which invests in futures contracts for both gold and Bitcoin while using derivatives to amplify potential profits. This ETF, which began trading earlier this week, has already increased by nearly 5% from its starting price. Another option is the 21Shares ByteTree BOLD ETP, available on European exchanges since 2022. Unlike the STKD ETF, ByteTree BOLD ETP directly invests in physical gold and spot Bitcoin, providing more immediate exposure to these assets.
Though the two funds have different approaches, both cater to investors who are interested in gold and Bitcoin. These assets benefit from a blend of fear and greed—gold thrives during uncertain times, while Bitcoin appeals to those looking for rapid, outsized returns.
The Rise of Gold and Bitcoin
In 2024, both gold and Bitcoin have achieved remarkable gains, driven by global events and economic conditions. Gold has climbed over 30% this year, reaching an all-time high of more than $2,700 per ounce. Ongoing conflicts in the Middle East and Ukraine have spurred demand for gold as a safe haven asset. Additionally, global trends toward lower interest rates and a weakening U.S. dollar have further supported gold prices.
Gold is generally traded in U.S. dollars, so its price rises when the dollar falls in value. Furthermore, lower interest rates make gold more appealing because it doesn’t generate a yield, reducing the opportunity cost of holding the metal in a low-rate environment.
Similarly, Bitcoin has surged by more than 60% in 2024, approaching its record high of $69,000. Many investors view Bitcoin as a hedge against inflation and currency debasement, similar to gold. Its limited supply—only 21 million Bitcoins will ever be mined—adds to its appeal as a scarce asset.
A New Investment Strategy
David Dziekanski, CEO and chief investment officer of Quantify Funds, describes the STKD Bitcoin & Gold ETF as a way for investors to gain exposure to “two themes with a common investment outlook.” Both assets, according to him, have limited supply—there’s only so much gold on Earth, and Bitcoin’s supply is capped by its algorithm. This scarcity boosts their attractiveness in a world where inflation concerns and currency debasement are increasingly relevant.
In a fact sheet on the ByteTree BOLD ETP, 21Shares promotes a similar narrative, emphasizing the combination of gold’s “proven success” and Bitcoin’s “emerging role as a store of value.” This offers investors a balanced approach to hedging against inflation.
The Key Differences Between Gold and Bitcoin
Despite their simultaneous rallies in 2024, gold and Bitcoin are not perfectly correlated assets. Gold is far more stable, while Bitcoin is known for its volatility. Bitcoin’s price tends to move more in sync with technology stocks than traditional commodities or currencies, like gold.
Alex Ebkarian, co-founder of Allegiance Gold, notes that while gold and Bitcoin share some similarities—such as benefiting from a global shift away from the U.S. dollar—they belong to fundamentally different asset classes. Gold has long been considered a classic store of value due to its stability, whereas Bitcoin is still in its early stages as a digital asset, subject to significant price swings.
“Time will tell, but you probably don’t want to substitute Bitcoin for gold or vice versa,” Ebkarian said in a recent interview. Instead, investors may benefit from holding both assets in a diversified portfolio.
Why Investors Are Looking to Both Assets
Investors are drawn to both Bitcoin and gold largely out of concerns about currency debasement. As governments worldwide continue to push for fiscal stimulus, there are fears that increased government spending and lower taxes could further erode the value of currencies, especially the U.S. dollar.
Dziekanski believes that owning both gold and Bitcoin offers a hedge against these risks. He argues that both assets stand to gain from expected fiscal stimulus policies in the coming years. “Bitcoin and gold will both have their day, sometimes collectively,” Dziekanski notes, indicating that both could continue to rise as central banks maintain low-interest rates and governments ramp up spending.
Looking Ahead: A Balanced Approach
For investors seeking exposure to both the stability of gold and the high-growth potential of Bitcoin, these new ETFs provide an appealing solution. Holding both assets offers a hedge against inflation and economic uncertainty while allowing participation in Bitcoin’s rapid growth.
As the financial landscape evolves, gold and Bitcoin may increasingly be viewed as complementary assets, rather than rivals. With central banks reducing reliance on the U.S. dollar and geopolitical tensions mounting, both gold and Bitcoin are likely to remain integral to the world of alternative investments.
