David Dziekanski- Quantify Funds

David Dziekanski is the founder and CEO of Quantify Funds. He spent 17 years in the investment and ETF world, including 11 years as a partner and portfolio manager at Tidal Financial Group, where he helped institutional managers bring ETFs to market. He made the jump to the client side to build his own products, partnering with both Tidal and another former Tidal client, Return Stacked, to bring something genuinely new to market. On this episode of Behind the Ticker, the last episode of 2024, David joins Brad to talk about BTGD, their stacked Bitcoin and gold ETF.

What "Stacked" Means in Practice

BTGD is a stacked product, which means for every dollar you invest, you get a dollar of Bitcoin exposure and a dollar of gold exposure. That's 200% total notional exposure from a single ETF. The Bitcoin exposure is achieved through Bitcoin futures contracts, and the gold exposure comes through gold futures as well. The fund automatically rebalances to maintain that 50/50 split between the two assets.

David explains the mechanics: the fund's assets sit as collateral, and futures provide the return exposure on top of that. The cost of achieving this leverage through futures is relatively efficient in today's market. He emphasizes that unlike daily-reset leveraged products like 2x or 3x ETFs, BTGD doesn't come with the "daily use only" warnings or the compounding decay problems that make those products a compliance headache. These stacked products are designed for longer holding periods, which David sees as a major differentiator for the advisor market. Getting a 2x leveraged product through an advisor's compliance department is typically a struggle. Getting BTGD through is a fundamentally different and much easier conversation.

Why Bitcoin and Gold Together

The pairing isn't random. Bitcoin and gold both serve as alternatives to traditional financial assets but have very different volatility profiles and return drivers. Gold is dramatically less volatile than Bitcoin. So in practice, the gold component mostly needs to cover the cost of financing (the cost of the futures contracts) to justify its inclusion. It's there to add a second return stream without dramatically increasing the risk profile beyond what Bitcoin already contributes.

David frames BTGD as fitting into the alternative sleeve of a portfolio, specifically as a debasement hedge. With inflation fresh in everyone's memory and questions about government spending and money printing more top-of-mind than they've been in decades, both Bitcoin and gold serve as stores of value outside the traditional financial system. Rather than choosing between them, an advisor can get both in a single position. With the explosion of spot Bitcoin ETFs in 2024 and the growing acceptance of Bitcoin as a legitimate portfolio allocation, the timing of the product launch was deliberate.

Benchmarking Challenges and Industry Growing Pains

Brad asked a pointed question about benchmarking: if you have a product with two distinct asset exposures, what do you measure it against? David acknowledges there's no clean single benchmark. The most accurate comparison is to look at Bitcoin and gold returns independently and subtract the cost of futures financing. You could also just benchmark against Bitcoin alone, since gold's lower volatility means it has a smaller impact on total returns.

But the bigger challenge is at the portfolio level. When an advisor adds BTGD to a model, the overall portfolio might be running at 110% total exposure. That creates reporting questions not just for the BTGD position but for the entire book. Performance attribution tools and risk reporting systems haven't caught up with stacked products yet. David sees this as an industry growing pain that will resolve as more stacked and capital-efficient products enter the market and the tools evolve to accommodate them. He also notes that stacked products are some of the first leverage-style tools that are genuinely acceptable in advisor models, unlike daily-reset leveraged ETFs.

Quantify Funds is also working with the Return Stacked team, which brings deep expertise in capital-efficient portfolio construction. David hints that more products are in the pipeline, building on the stacked concept across different asset class combinations.

Key Takeaways

• BTGD gives investors $1 of Bitcoin and $1 of gold exposure for every $1 invested, using futures to achieve 200% total notional exposure with automatic 50/50 rebalancing.
• Unlike daily-reset leveraged ETFs, BTGD doesn't carry "daily use" warnings, making it significantly easier for advisors to include in model portfolios from a compliance perspective.
• The fund is positioned as a debasement hedge for the alternatives sleeve. With inflation fresh in memory, both Bitcoin and gold serve as stores of value outside the traditional system.
• Gold's lower volatility means it mostly needs to cover financing costs to add value; Bitcoin drives the upside potential and most of the return variance.
• David spent 11 years at Tidal Financial Group before launching Quantify Funds with Return Stacked. More stacked products are in the pipeline. Find them at quantifyfunds.com.

Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.