In a filing filed with the U.S. Securities and Exchange Commission on October 26, the company disclosed the Direxion Bitcoin Strategy Bear ETF. Like other futures products, it will not invest directly in BTC, but will instead maintain managed short exposure position contracts issued by the Chicago Mercantile Exchange (CME).
Direxion said the fund may invest in other BTC futures, money market funds, deposit accounts or short-term debt instruments. However, the company issued a serious warning that the value of the product could reach zero.
“The value of an investment in the Fund could drop significantly and without warning, including down to zero. You must be prepared to lose your entire investment.
Eric Balchunas, senior analyst at Bloomberg, described it as a reverse Bitcoin ETF. He reported that the company already has a “1x BTC futures ETF” in Canada called BITI, adding “although it’s pretty destroyed, when it works it WORKS (because Bitcoin tends to sell out quickly). “
REVERSE BITCOIN ETF: Direxion has just filed for a Bitcoin Futures -1x ETF, which will seek to be short-term bitcoin futures, essentially the $XIV from $ BITO.. This comes just a few hours after the deposit of the first leveraged bitcoin ETF. pic.twitter.com/bN2m7pIZw5
– Éric Balchunas (@EricBalchunas) October 26, 2021
Direxion initially filed a Bitcoin ETF in 2018, but it ended up in the queue with everyone else that the SEC had delayed at the time.
Bloomberg reported that on October 26, Valkyrie filed a leveraged BTC futures ETF that will provide 1.25 times exposure to the asset. If approved, it will trade under the symbol BTFX and may hold futures, swaps, options and futures.
Not everyone was impressed with the minimal leverage available, with user VandelayBTC referring to a Zoolander meme for shade.
1.25x? What is that? Leverage for the ants?
– Vandelay ₿TC Industries (@VandelayBTC) October 26, 2021
A report: Too Popular: Bitcoin Futures ETF May Reach Upper Contract Limit
Commenting on the new creative futures on offer right now, ETF Store President Nate Geraci noted that there will be more of these types of ETH deposits and futures before a spot product is approved.
“The SEC has blessed CME Bitcoin futures from a regulatory standpoint. If these leveraged and reverse products exist in other blessed markets, then no reason not to exist here.
As in response to the bearish product proposal, Bitcoin prices fell 3.6% in the past 24 hours to trade at $ 60,787 at the time of writing.