What is the difference between a bear and an ant? Cryptocurrency traders like to use these phrases in different contexts. The answer: leverage for ants, but you will need some bears on your side to be successful.
The “ultra short dollar etf” is a cryptocurrency that has been created to help traders hedge their positions. The currency has leveraged the power of leverage for ants.
Direxion, an exchange-traded fund company, has filed for a product that would allow speculators to purchase Bitcoin price shorting contracts.
The Direxion Bitcoin Strategy Bear ETF was announced in a filing to the US Securities and Exchange Commission on Oct. 26. It will not invest directly in BTC, like other futures products, but will instead hold managed short exposure position contracts issued by the Chicago Mercantile Exchange (CME).
The fund may invest in other BTC futures, money market funds, bank accounts, or short-term debt instruments, according to Direxion. The company did, however, issue a stern warning that the product’s worth may plummet to zero.
“The value of an investment in the Fund might drop dramatically and unexpectedly, perhaps to nothing.” You should expect to lose the whole of your money.”
Eric Balchunas, a senior ETF analyst at Bloomberg, characterized it as an inverse Bitcoin ETF. He said the firm already has a ‘-1x BTC futures ETF’ named BITI in Canada, and that “although it’s been fairly wrecked, when it works, it WORKS (as Bitcoin tends to sell down quickly).”
Direxion has filed for a -1x Bitcoin Futures ETF, which will strive to be short front month bitcoin futures, essentially the $XIV of $BITO. This announcement came only hours after the first leveraged bitcoin ETF was registered. pic.twitter.com/bN2m7pIZw5
October 26, 2021 — Eric Balchunas (@EricBalchunas)
Direxion applied for a Bitcoin ETF in 2018, but it got lost in the shuffle with the rest of the ETFs that the SEC had put on hold at the time.
According to Bloomberg, Valkyrie applied for a leveraged BTC futures ETF on Oct. 26 that will provide 1.25x exposure to the asset. It will trade under the ticker BTFX and will be able to handle futures, swaps, options, and forwards if allowed.
Some users were not happy with the little leverage provided, with user VandelayBTC mocking a Zoolander parody.
1.25x? What exactly is this? For ants, leverage?
October 26, 2021 — Vandelay TC Industries (@VandelayBTC)
Too popular: The Bitcoin futures ETF is on the verge of exceeding the contract’s upper limit.
ETF Store President Nate Geraci indicated that there would be more of these sorts of files and ETH futures before a spot product is approved, in response to the imaginative new futures products being suggested at the present.
“From a regulatory standpoint, the SEC has approved CME Bitcoin futures. If these leveraged and inverted instruments are available in other blessed markets, there’s no reason why they shouldn’t be available here.”
Bitcoin prices have fallen 3.6 percent in the last 24 hours, trading at $60,787 at the time of writing, as if in reaction to the pessimistic product proposal.