Valkyrie Files to Offer a Leveraged Bet on Bitcoin Futures, Direxion to Provide Short Exposure to CME Contracts
Just days after launching the Bitcoin futures exchange-traded fund (ETF), Valkyrie Investments is ready to offer amped-up returns to its users.
Valkyrie (BTFD) was second to ProShares Bitcoin Strategy ETF (BITO) to the market, and now it has filed an application with the Securities and Exchange Commission to launch the Valkyrie XBTO Levered BTC Futures ETF.
The ETF, which would trade under the ticker BTFX, would offer a leverage of 1.25 times to the bitcoin reference rate, according to the filing. It would list on Nasdaq and hold derivatives such as futures and options.
It’s to be seen if the SEC will allow this levered fund to trade, but for now, they have 75 days to respond to the Valkyrie filing.
The same day, ETF Issuer Direxion filed for a Direxion Bitcoin Strategy Bear ETF that will provide short exposure to the price of Bitcoin futures contracts issued by the CME.
By investing in this product, the investor bets on the price of Bitcoin futures going down.
“The Fund will generally maintain its short exposure to Bitcoin Futures during periods in which the value of bitcoin is flat or declining as well as during periods in which the value of bitcoin is rising.”
While the ETF will not invest in the cryptocurrency directly, it may invest in other bitcoin futures ETFs or money market funds, deposit accounts, or short-term debt instruments. Nate Geraci, president of The ETF Store, said,
“I don't see how SEC doesn't approve this & Valkyrie's 1.25X product… door is open now. SEC has blessed CME bitcoin futures from a regulatory perspective. If these leveraged & inverse products exist in other blessed markets, then no reason not to exist here.”
“We gonna see all of these products and Ether futures ETFs before a spot product.”