Bitcoin and Gold Face Off in ETF Showdown
A long-standing rivalry between bitcoin and gold is heading into the ETF arena. Tidal Financial Group has filed for two novel long-short ETFs under the Battleshares brand. These will let investors bet directly on which asset performs better: bitcoin or gold.
The products target the growing debate about which store of value can better withstand inflation, geopolitical tension, and monetary shifts. While both assets surged recently, they did so for different reasons. Gold on haven demand, bitcoin on digital finance momentum.
How the Bitcoin vs Gold ETFs Work
The proposed ETFs use complex instruments like swaps, options, and short sales. One product goes long bitcoin and short gold. The other does the reverse. It’s a high-conviction trade for investors with strong opinions about market direction.
Dhaval Joshi of Counterpoint says the launch is a “victory” for those who see bitcoin as the next gold. He believes bitcoin will steadily grab market share from the metal. “Long BTC/short gold should trend higher over time,” he said.
Critics Call the Bitcoin ETF Battle Gimmicky
Not everyone’s convinced. Brent Donnelly of Spectra FX Solutions called the ETFs “gimmicky and unnecessary.” He argues investors can already pair assets like IBIT (BlackRock’s bitcoin ETF) and GLD (State Street’s gold ETF) for much lower fees.
Despite the criticism, investors continue to pour money into both asset classes. This year alone, $8 billion flowed into top bitcoin ETFs, while gold ETFs gained over $14 billion. The demand for alternative assets is rising in uncertain times.
Bitcoin Soars as Gold Retreats After Fed Decision
Markets bounced last month despite ongoing volatility. On Thursday, bitcoin soared past $100,000, while gold dipped after the Fed chose to hold interest rates steady. The move further fueled the narrative that bitcoin thrives in periods of economic optimism.
Meanwhile, gold remains a favorite in times of geopolitical unrest. The diverging performance highlights why investors may want tools to trade the relative strength between these two assets.
Battleshares Looks to Capitalize on Market Volatility
The firm behind the ETFs, Battleshares, has a history of launching long-short products. Its first fund, ELON, pits Tesla against Ford. Though the fund has struggled to attract assets, Battleshares is betting on the growing popularity of high-volatility, derivative-based ETFs.
The new bitcoin and gold ETFs aim to serve traders who want more than passive exposure. With the rise of single-stock leveraged ETFs and retail traders chasing fast-moving markets, this niche may find its audience.
Bitcoin or Gold? Both Still Have a Role
Charlie Morris of Bytetree Asset Management, which manages BOLD (an ETF that blends gold and bitcoin), believes both assets will thrive—but at different times. “Gold tends to do better during geopolitical risk,” he noted. “Bitcoin shines when sentiment improves and markets run.”
He sees the clash between bitcoin and gold as reflective of broader economic uncertainty. Investors are turning to uncorrelated, scarce assets to hedge against currency risk, inflation, and market instability.