In a recent episode of Behind the Ticker, David Dziekanski, founder and CEO of Quantify Funds, introduced his firm’s first ETF, the STKD Bitcoin and Gold ETF (ticker: BTGD). With 17 years of experience in the investment and ETF industry, including 11 years as a partner at Tidal Financial Group, Dziekanski launched Quantify Funds to bring innovative, efficient investment solutions to market. BTGD represents a novel approach to leverage ETFs, offering exposure to both Bitcoin and gold in a single investment vehicle.
About David Dziekanski- Quantify Funds
BTGD is structured as a “stacked” ETF, providing $1 of exposure to Bitcoin and $1 of exposure to gold for every $1 invested. This 50-50 blend offers a leveraged, long-term approach without the typical path dependency or decay associated with traditional leverage products. The fund utilizes a combination of futures and exchange-traded products to optimize leverage and manage rebalancing efficiently. Dziekanski explained that the fund targets a 5-7% rebalance drift to minimize trading costs while maintaining the desired asset allocation.
Investment Strategy and Approach
The rationale behind combining Bitcoin and gold lies in their shared status as scarcity assets. Gold, with its historical role as a store of value, and Bitcoin, often referred to as “digital gold,” both offer protection against currency debasement. Dziekanski noted that the mining rates of Bitcoin (0.86% annually) and gold (1.75% annually) are significantly lower than the 7-9% annual currency printing rates of developed nations, making them ideal assets for a hedge against inflation and declining currency values.
Dziekanski also highlighted how the differing volatility and correlations of Bitcoin and gold enhance the portfolio’s resilience. Bitcoin’s higher volatility is balanced by gold’s stability, allowing for effective rebalancing during market shifts. Historical data shows that gold has performed well during past crypto winters, providing diversification benefits and mitigating drawdowns. Advisors are encouraged to view BTGD as a debasement hedge or a high-volatility alternative in portfolios, with suggested allocations ranging from 2-5%.
Deeper Dive: Insights from the Full Conversation
Beyond the headline strategy, the full conversation between Brad and David Dziekanski- Quantify Funds covered several additional themes worth highlighting for advisors and investors.
On Process and Philosophy
And yes, the whole advisory space is going to need to catch up on performance tools and comparison tools to start. Incorporating some of these new stack products, these we think are really some of the first tools that are really acceptable in advisor models. These unlike the daily use leverage ETFs don't come with warnings of daily use. They should be much less of a compliance nightmare in advisors models, but the second you have an advisor who through underlying ETF starts managing a portfolio that is 110% overall exposure.
Across your entire model allocation that was don't believe that was meant just for an aggressive growth portfolio. I think that's actually the most alarming not alarming but interesting thing of that statement is this is not just a growth asset this is a protection asset. They didn't say put this in your Roth IRA they said one to two percent across the board. So I think advisors have more knowledge than they're able to lead on because they're not allowed to really voice that opinion or that knowledge to the marketplace or specifically to their clients.
Market Context and Positioning
So my name is David J.Kansky. I'm the founder and CEO of Quantify Funds. I've been in the investment in ETF world for gosh about 17 years. The last 11 years I was a partner and portfolio manager at title financial group platform to help institutional managers bring ETFs to the marketplace. Took the jump and moved over to the client side and I'm now partnering with both title and another client of titles. The return stack ETF folks to bring you this stack lineup we have here, but they're first offering being the STKD Bitcoin and Gold ETF ticker BTGD.
So STKD is short for stacked. This is a stacked ETF. We stack two different assets on top of each other. In this case, we're stacking Bitcoin on top of gold. So for every dollar you put in the ETF, you get a $1 exposure to Bitcoin and a $1 exposure to gold. Alternatively, you can also think of it as a poor portfolio that is a 50, 50 mix of Bitcoin gold times two. So this is a new way to do leverage ETFs, where we're not just leveraging the same asset on top of itself, which allows for what we'd like to call leverage for the long run, leverage with less path dependency and potential for decay.
Bitcoin in its simplest form is digital gold. These are two assets that mine at a rate that is much smaller than the rate at which paper currency's print. Develop nations print about seven to nine percent of currencies and circulation each year. Bitcoin mines at about 0.86% a year, whereas gold mines at about 1.75% a year. So in its simplest form at what pace will develop, markets around the world print their currency and the bet is that it's going to be over that 2% mark.
Notable Insights
"I think the real bet is not necessarily what it is correlated to today, but what it will trend towards correlation wise in the future."
Key Takeaways
- This 50-50 blend offers a leveraged, long-term approach without the typical path dependency or decay associated with traditional leverage products.
- Dziekanski explained that the fund targets a 5-7% rebalance drift to minimize trading costs while maintaining the desired asset allocation.
- The conversation explores important themes in income investing relevant to today's advisor landscape.
What This Means for Advisors
For financial advisors evaluating options for client portfolios, this conversation with David Dziekanski- Quantify Funds highlights important considerations around fixed income. Understanding the strategy behind each fund—not just the ticker—helps advisors make more informed allocation decisions and better communicate the rationale to clients.
The themes of fixed income and crypto & digital assets discussed in this episode are particularly relevant in the current market environment, where advisors are increasingly looking for differentiated solutions that go beyond traditional benchmarks.
Listen to the Full Episode
This article is based on an episode of Behind the Ticker, hosted by Brad Roth, Founder and CIO of THOR Financial Technologies. For the full conversation with David Dziekanski- Quantify Funds, including additional nuances and details, listen on Spotify, Apple Podcasts, or watch on YouTube.