Direxion, the issuer of exchange-traded funds, has applied for a product that will enable speculators to buy contracts that short bitcoin prices.
in a Record The company submitted the Direxion Bitcoin Strategy Bear ETF to the US Securities and Exchange Commission on October 26. Like other futures products, it will not invest directly in BTC, but will maintain a managed short position contract issued by the Chicago Mercantile Exchange (CME).
Direxion stated that the fund may invest in other Bitcoin futures, Money market funds, deposit accounts or short-term debt instruments. However, the company did issue a terrible warning that the value of the product may be zero.
“The investment value of the fund may drop significantly without warning, including to zero. You should be prepared to lose your entire investment.”
Bloomberg senior ETF analyst Eric Balchunas described it as a reverse Bitcoin ETF. He reported that the company already owns a “-1x BTC futures ETF” called BITI in Canada, adding that “Although it is already bad, when it works, it is effective (because Bitcoin tends to Will sell off quickly).”
Reverse Bitcoin ETF: Direxion has just applied for a -1x Bitcoin futures ETF, it will seek to short recent Bitcoin futures, basically $14 of $Bitcoin.. This was only a few hours after the submission of the first leveraged Bitcoin ETF. pic.twitter.com/bN2m7pIZw5
— Eric Balchunas (@EricBalchunas) October 26, 2021
direction Initially applied for Bitcoin ETF in 2018 But it ended up in the queue with all the others who were postponed by the SEC at the time.
Bloomberg Report On October 26, Valkyrie applied for a leveraged BTC futures ETF, which will provide 1.25 times exposure to the asset. If approved, it will trade under the stock code BTFX and can hold futures, swaps, options and forward contracts.
Not everyone is impressed by the minimum leverage available, and user VandelayBTC refers to the Zoolander meme to cast a shadow.
1.25 times? what is this? The lever of ants?
— Vandelay ₿TC Industries (@VandelayBTC) October 26, 2021
related: Too popular: Bitcoin futures ETF is in danger of hitting the contract limit
Nate Geraci, President of ETF Store, commented on the creative new futures products currently proposed Said There will be more such documents and ETH futures before the spot product is approved.
“From a regulatory perspective, the SEC has provided blessings to CME Bitcoin futures. If these leveraged and inverse products exist in other blessed markets, then there is no reason not to exist here.”
As if in response to a bearish product proposal, at the time of writing, the Bitcoin price has fallen by 3.6% in the past 24 hours and is trading at $60,787.