One for the bear, one for the ‘lever for the ants’
Exchange traded fund issuer Direxion has applied for a product that will allow speculators to buy bitcoin short contracts.
In a filing with the US Securities and Exchange Commission on October 26, the company announced the Direxion Bitcoin Strategy Bear ETF. Like other futures products, it will not invest in BTC directly, but instead will have short-term contracts for short trade positions issued by the Chicago Mercantile Exchange (CME).
Direxion states that the Fund may invest in other BTC futures contracts, money market funds, deposit accounts or short term debt securities. However, the company strongly warned that the value of the product could drop to zero.
“The value of an investment in the Fund can go down significantly and without warning, even to zero. You should be prepared for the loss of your entire investment.”
Bloomberg Senior ETF Analyst Eric Balchunas described it as an inverse Bitcoin ETF. He reports that the company already has a ‘-1x BTC futures ETF’ in Canada called BITI, adding that “although it’s pretty badly damaged when it works, it tends to work (because of Bitcoin) quickly for sale).”
INVERSE BITCOIN ETF: Direxion has just applied for a -1x Bitcoin Futures ETF which is essentially supposed to become a short-term Bitcoin futures contract for the month $ XIV of $ BITO.. This happened just hours after the first Bitcoin leveraged ETF was filed. pic.twitter.com/bN2m7pIZw5
– Eric Balchunas (@EricBalchunas) October 26, 2021
Direxion originally filed for a Bitcoin ETF in 2018, but it ended up in the queue with all the others that the SEC was delaying at the time.
Bloomberg reported that Valkyrie filed an application on October 26 for a leveraged BTC futures ETF that offered 1.25 times the risk of the asset. If approved, it will trade under the ticker-ticker BTFX and may hold futures, swaps, options and forwards.
Not everyone is impressed with the minimal leverage available as user VandelayBTC mentions the Zoolander meme for pitching.
1.25x? What is it? Leverage for ants?
– Vandelay ₿TC Industries (@VandelayBTC) October 26, 2021
Related: Too popular: Bitcoin futures ETF risks hit the upper limit for contracts
ETF Store President Nate Geraci comments on the innovative new futures products that are currently being proposed speak that there will be more of this type of data set and ETH futures before the spot product is approved.
“The SEC has blessed CME Bitcoin Futures from a regulatory perspective. If these leverage and reversal products exist in other lucky markets, there is no reason not to exist here. “
As if in response to a bearish product proposal, Bitcoin price has fallen 3.6% in the past 24 hours, to stand at $ 60,787 as of press time.