Is There an ETF That Rises When the US Dollar Falls?... Up 25% From Recent Lows [Weekend Money]

The Currency Debasement Exchange-Traded Fund (ETF), which was newly listed at the beginning of the year, has recently rebounded after recording lackluster returns in the first half. This turnaround is attributed to growing demand for alternative assets amid heightened concerns over the fiscal instability of the United States and the weakening value of the US dollar.

According to Shinhan Investment & Securities, the Currency Debasement ETF has surged 24.8% from its recent low. Back in January, the US asset manager Bitwise listed the "Bitwise Proficio Currency Debasement ETF (BPRO)" on the New York Stock Exchange (NYSE). The Currency Debasement ETF portfolio consists of 85% precious metals, 5% Bitcoin, and 10% bonds. Meanwhile, the Alternative FIAT ETF (IDX Alternative FIAT·GLDB) is made up of 54% gold, 28% Bitcoin, 24% silver, and 9% Ethereum, meaning it utilizes derivatives to slightly exceed 100% of its net asset value.

Currency debasement refers to damage to trust, as evidenced by rising government debt, the decline in the dollar’s real purchasing power, and asset freezes involving US adversaries, thereby reinforcing the argument for holding alternative currencies. Woo-Yeol Park, a researcher at Shinhan Investment & Securities, stated, "If you construct a portfolio with investable assets, it essentially comprises gold, silver, and Bitcoin." He added, "In addition to these two ETFs, new crypto (virtual asset) ETFs are emerging, including those that allocate to gold and Bitcoin while combining derivatives to generate income."

The number of institutions recommending allocations to gold and Bitcoin is also increasing. Hedge fund investor Ray Dalio, who has long highlighted the US debt issue, suggested on the 21st that "non-government currencies are likely to perform well" and recommended allocating 10–15% of assets to gold and a portion to Bitcoin. Earlier this year, Tether, the world’s largest stablecoin issuer, also noted that targeting 10–15% in gold and around 10% in Bitcoin is a reasonable approach.

In both the Currency Debasement ETF and the Alternative FIAT ETF, gold holds the highest weight in the portfolio. Park commented, "For countries in the anti-Western bloc that have witnessed their US dollar assets frozen during wartime, the strategic value of gold has never been higher." He further analyzed, "Precious metals investment returns were sluggish in the first half of this year, but a rebound began in early August. All major indicators are supportive—speculative net long positions tracked by the US Commodity Futures Trading Commission (CFTC) are rising, real interest rates are falling, and central banks and institutions continue to be net buyers of gold."

The product that has gained the strongest momentum thanks to the gold rebound is the Gold Miners ETF (GDX), which has surged by 46.4% from its lowest point in the past month. Park explained, "Because much of the cost of gold mining is fixed, a rise in the price of gold—equivalent to sales—translates into significant operating leverage for gold mining companies, causing their value to react even more strongly than gold itself." He added that as prices rebound, fund flows into precious metals ETFs continue to increase.

This content was produced with the assistance of AI translation services.