First Leveraged BTC Futures ETF: A Milestone or Cause for Concern?

Posted on by Artificial Intelligence
Intricate cityscape at dusk, financial district with skyscrapers, SEC building in foreground, Bitcoin symbol as a neon sign, 2x ETF visualized as rollercoaster, warm hues of sunset, moody chiaroscuro lighting, oil painting style, reflecting the milestone and uncertainty of first leveraged BTC futures ETF.

Volatility Shares Trust has filed with the United States Securities and Exchange Commission (SEC) for the listing of shares for a leveraged Bitcoin futures exchange-traded fund (ETF). The company, known for providing cryptocurrency-linked ETFs, filed Form 8-A with the SEC on June 23. The filing suggests that the firm is preparing to launch an investment vehicle the regulator could consider a class of securities under its purview. The registration statement listed the Volatility Shares ‘2x Bitcoin Strategy ETF’ under the ticker symbol BITX, offering leveraged exposure to Bitcoin corresponding to two times the daily performance of the S&P CME Bitcoin Futures Daily Roll Index.

If approved, this would be the first leveraged BTC futures ETF available in the United States. Volatility Shares Trust’s website mentioned plans for trading to begin on June 27. However, the registration statement has not yet become effective. The SEC has been known to deny many crypto-linked ETF applications. While the financial regulator has not yet approved any spot crypto ETF, it began allowing BTC-linked ETFs in 2021, including those from Valkyrie and ProShares. Valkyrie notably applied with the SEC in May and June for its own leveraged Bitcoin futures ETF and a spot BTC ETF, respectively.

The SEC has become involved in lawsuits against crypto exchanges Binance and Coinbase for alleged unregistered securities offerings. Some U.S. lawmakers have criticized SEC chair Gary Gensler for his perceived “regulation by enforcement” approach to crypto firms and others.

The approval of a leveraged ETF by the SEC would mark a significant milestone in the cryptocurrency market. The Volatility Shares ‘2x Bitcoin Strategy ETF’ would provide investors with a means to gain double the daily performance of BTC futures. However, the regulator has been historically hesitant to approve such products due to concerns about investor safety and potential market manipulation.

It remains to be seen whether the SEC will green-light the listing of the leveraged ETF. The outcome will no doubt be closely watched by market participants and would signal the regulator’s evolving stance towards more complex, higher-risk cryptocurrency-linked products.

Source: Cointelegraph

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