Exchange-traded fund issuer Direxion has filed for a product that would allow speculators to buy contracts that short the price of Bitcoin.
In a filing with the US Securities and Exchange Commission on October 26, the company introduced the Direxion Bitcoin Strategy Bear ETF. Like other futures products, it will not invest in BTC directly, but rather managed short exposure position contracts issued by the Chicago Mercantile Exchange (CME).
Direxion stated that the fund may invest in other BTC futures, 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 could drop significantly to zero without warning. You should be ready to lose all of your investment. “
Bloomberg senior ETF analyst Eric Balchunas described it as an inverse Bitcoin ETF. He reported that the company already has a ‘-1x BTC futures ETF’ in Canada called BITI, adding, “While it’s pretty broken, when it works it works (since Bitcoin tends to sell quickly ). “
INVERSE BITCOIN ETF: Direxion has just applied for a -1x Bitcoin Futures ETF which will be short front monthly Bitcoin futures, basically the $ XIV from $ BITO.. This happens just a few hours after the first Bitcoin leveraged ETF was submitted. 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 for a leveraged BTC futures ETF on October 26th that offers 1.25x exposure to the asset. If approved, it will trade under the ticker BTFX and hold futures, swaps, options and forwards.
Not everyone was impressed with the minimal leverage available, with user VandelayBTC referring to a Zoolander meme to cast shadows.
1.25x? What is it? Leverage for ants?
– Vandelay ₿TC Industries (@VandelayBTC) October 26, 2021
Related: Too popular: Bitcoin futures ETF threatens to reach the upper limit for contracts
ETF Store President Nate Geraci comments on the creative new futures products that are currently being proposed called that there will be more of these types of filings and ETH futures before a spot product is approved.
“The SEC has blessed CME Bitcoin futures from a regulatory perspective. If these leveraged and inverse products exist in other blessed markets, then there is no reason not to exist here. “
As in response to the bearish product proposal, Bitcoin prices have declined 3.6% in the past 24 hours, trading at $ 60,787 at the time of writing.