Direxion, a financial product launch and management company, has filed with the SEC to launch an ETF on Bitcoin futures, and Valkyrie is awaiting approval for a 1.25x leverage ETF.
According to Direxion’s filing, the Bitcoin Strategy Bear ETF will invest in Bitcoin futures on the CME platform. However, we are talking about the opening of exclusively “short” positions in futures. That is, the fund’s shares will grow with a decrease in the bitcoin rate and the price of futures.
“Bitcoin and Bitcoin futures are fairly new instruments that pose unique and high risks. The value of a fund’s investment could decline significantly, including falling to zero. You must be prepared to lose the full amount of your investment. The market behavior of bitcoin futures, like that of a fund, can differ significantly from the bitcoin rate in the derivatives market, ”warn the authors of the application.
How noted Eric Balchunas, Senior ETF Analyst at Bloomberg, Direxion already has a similar fund in Canada called BITI. Balchunas noted that the fund shows itself “average”, but in moments of rapid decline in the bitcoin rate, it is an excellent tool.
Another application was submitted by Valkyrie. This is about investing in bitcoin futures with a leverage of 1.25x. The fund will trade under the ticker BTFX and has already been dubbed the “ETF for ants” due to its extremely small leverage.
“I’m not surprised that companies are trying to launch leveraged ETFs – this is a common situation where a tool gets attention. More interestingly, the leverage is only 1.25. It’s like a Diet Coke – a very small size. At the same time, even so, investments can significantly sink, but the profit is higher “, – wrote Balchunas.
As a reminder, Valkyrie has already launched an ETF on bitcoin futures under the ticker BTF. Compared to the first fund from ProShares, it has not received much attention, but a leveraged fund can attract more investors.
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