Direxion Files for Bitcoin ETF With a Deviation, to Track Shorts on BTC Futures
Godfrey Benjamin Oct 28, 2021 06:30
American financial services and ETF provider, Direxion has filed for its Bitcoin ETF product, after more than 3 years since it last filed one.
American financial services and ETF provider Direxion has filed for its Bitcoin ETF product after more than three years since it last filed one.
Per the company’s filing with the US SEC, the Direxion product, dubbed Direxion Bitcoin Strategy Bear ETF, takes a bit of deviation when compared with other filings in that it will maintain short exposure to bitcoin futures contracts issued by the Chicago Mercantile Exchange.
“The fund will generally maintain its short exposure to bitcoin futures during periods in which the value of bitcoin is flat or declining as well as during periods in which the value of bitcoin is rising,” the filing said.
Direxion said it would not invest the coin directly in Bitcoin; instead, it will inject its capital into other Bitcoin futures ETFs, as well as other financial instruments that can help in capital appreciation. Drawing on the unusual nature of its short position on the ETF, the outfit warns that its product has no guarantee of yielding the desired results, and is thus unsuitable for investors who are not ready to lose money.
“There is no assurance that the Fund will achieve its investment objective and investment in the Fund could lose money. No single Fund is a complete investment program,” the filing reads.
The advent of the ProShares Bitcoin Futures ETF last week has energized investment managers across the board, and many are becoming creative with their ETF applications. While an actual Bitcoin ETF is still out of reach of investors as the SEC is unconvinced that the market is mature enough and rid of price manipulation.
Nonetheless, investors now have an array of ways to gain exposure to the premier digital currency. These ways include but are not limited to spot market purchases, Bitcoin Futures ETF, and buying the shares of Bitcoin-focused public companies like Coinbase Global Inc.
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