The first leveraged bitcoin futures ETF is launched. Crypto is gaining momentum
Traders will soon have a new way to bet on Bitcoin as Wall Street waits to see if the long-awaited spot Bitcoin funds are approved by federal regulators. The Volatility Shares 2x Bitcoin Strategy ETF (BITX) is set to launch on Tuesday. There are already several bitcoin futures funds on the market, including the $1 billion ProShares Bitcoin Strategy ETF (BITO), but BITX will be the first leveraged exchange-traded fund in this space. “There’s already a large audience for leveraged products, and to combine that with an inherent interest in all things crypto — so we feel like there’s a pretty good audience for it,” he said , Chief Operating Officer of Volatility Shares. The launch comes shortly after BlackRock sparked renewed interest in crypto funds with its application for a spot Bitcoin ETF. The U.S. Securities and Exchange Commission has long opposed a spot Bitcoin fund and is in litigation with Grayscale over a similar proposal, but several other firms quickly followed BlackRock with their own filings. Bitcoin price has also gained momentum since BlackRock filing, topping $30,500 on Tuesday. BTC.CM= 1M Mountain The price of Bitcoin has increased since BlackRock’s filing on June 15th. Kim said the Volatility Shares fund and the proposed Spot Bitcoin ETF are “completely different products” with different use cases. BITX, which uses margin accounts to gain leverage, is designed as a short-term trading vehicle, and the fund’s prospectus notes that the promised 2x return is for single-day periods only. Similar to many leveraged products, BITX is more expensive than traditional ETFs with a 1.85% management fee. Volatility Shares is a small ETF manager and BTIX will be its first crypto-related fund. Its largest fund is the 2x Long VIX Futures ETF (UVIX), which has just under $100 million in assets. “Although this is our first foray into Bitcoin per se, we’re well-versed in managing ETFs that invest in futures,” Kim said.
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