Funding Agency Goals to Launch a Bitcoin ‘Bear ETF’ That Shorts BTC Futures

An exchange-traded fund (ETF) that shorts the worth of Bitcoin futures contracts would possibly quickly be obtainable on Wall Road. 

Direxion Shares ETF Belief, an ETF issuer, yesterday applied to the SEC for an ETF that may wager on the worth of the most important cryptocurrency happening—aptly named the “Bear ETF.”

An ETF is a well-liked funding device traded on a inventory change that lets folks purchase shares that signify a selected asset, sector, commodity, or safety. 

The primary-ever U.S. Bitcoin-related ETF, ProShares’ Bitcoin Technique ETF, began buying and selling on the New York Inventory Change final week. The futures ETF, which lets traders purchase and promote shares that signify contracts betting on the worth of Bitcoin, was massively fashionable: it traded virtually $1 billion in shares on its first day, which practically broke the report for a debuting ETF.

Now plenty of funding firms are hoping to comply with go well with and are making use of to the SEC for related cryptocurrency-related ETF merchandise. The SEC is anticipated to approve plenty of future ETFs within the coming weeks—although not a spot-based product that immediately tracks the worth of the asset itself. 

However the Direxion Shares Bear ETF can be distinctive as a result of traders can be rewarded if the worth of Bitcoin dips. “It was solely a matter of time in our opinion earlier than one among these was filed,” Bloomberg ETF analysis analyst James Seyfarrt advised Decrypt

“It would reset each single day and carry out the precise reverse of Bitcoin over time,” he added. “So, primarily, if Bitcoin goes up 5% in a single buying and selling day, this ETF will return -5%. And vice versa.”

The SEC software mentioned that the “fund will typically keep its brief publicity to Bitcoin Futures during times wherein the worth of Bitcoin is flat or declining in addition to during times wherein the worth of Bitcoin is rising.” It added that the fund wouldn’t immediately make investments or maintain Bitcoin. 

A Bitcoin-related ETF that shorts the worth of Bitcoin already exists in Canada—the place there are a number of crypto ETFs. The Betapro Inverse Bitcoin ETF, began buying and selling in April on the Toronto Inventory Change. The product was launched for many who suppose “Bitcoin is overdue for a correction.”

And in Europe, the Europe 21Shares Quick Bitcoin exchange-traded product (ETP)—an identical funding device—launched final yr.


The views and opinions expressed by the writer are for informational functions solely and don’t represent monetary, funding, or different recommendation.

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