Exchange-traded fund issuer Direxion has requested a product that would allow speculators to buy contracts that lower the price of Bitcoin.
in a presentation made to the US Securities and Exchange Commission on October 26, the company introduced the Direxion Bitcoin Strategy Bear ETF. Like other futures products, you will not invest directly in BTC, but will instead hold 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 instruments. However, the company issued a dire warning that the value of the product could reach zero.
“The value of an investment in the Fund could decrease significantly and without notice, even to zero. You must 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 has a 'BTC -1x futures ETF' in Canada called BITI, adding that "while it's been pretty broke, when it works, it WORKS (as Bitcoin tends to sell fast)."
REVERSE BITCOIN ETF: Direxion just applied for a -1x Bitcoin futures ETF, which will look to be short month bitcoin futures, basically the $ XIV from $ BITO.. This occurs a few hours after the first leveraged bitcoin ETF was presented. pic.twitter.com/bN2m7pIZw5
- Eric Balchunas (@EricBalchunas) October 26, 2021
Direxion originally applied for a Bitcoin ETF in 2018 but he ended up in the queue with everyone else the SEC had delayed at the time.
Bloomberg reported that on October 26, Valkyrie applied for a leveraged BTC futures ETF that will offer 1.25x exposure to the asset. If approved, it will trade under the ticker symbol BTFX and will be able to hold futures, swaps, options and forwards.
Not everyone was impressed with the minimum leverage available, and user VandelayBTC referenced a Zoolander meme to cast a shadow.
1.25x? What is this? Leverage for ants?
- Vandelay Industries ₿TC (@VandelayBTC) October 26, 2021
Related: Too popular: Bitcoin futures ETFs in danger of hitting upper limit for contracts
Commenting on the new creative futures products being proposed at this time, ETF Store President Nate Geraci said that there will be more of these types of ETH presentations and futures before a spot product gets approved.
“The SEC has blessed CME's 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 retreated 3.6% in the last 24 hours to trade at $ 60,787 at the time of writing.
