US investors will now have access to the first leveraged ETF based on CME Bitcoin futures with the approval of the Volatility Shares 2x Bitcoin Strategy ETF (BITX). The SEC’s decision comes amid ongoing debates about spot Bitcoin ETFs, marking a significant milestone for cryptocurrency investment products.
Key Features of BITX
- Leverage: 2x daily performance of the S&P CME Bitcoin Futures Daily Roll Index.
- Ticker: BITX (tradable on CBOE).
- Expense Ratio: 1.85% annually.
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SEC Approves Futures-Based Bitcoin ETF
The SEC’s approval of BITX follows BlackRock’s recent filing for a spot Bitcoin ETF. However, like all previously approved Bitcoin ETFs, BITX relies on CME futures contracts rather than spot prices. The SEC maintains that crypto exchanges lack sufficient safeguards against market manipulation—a stance challenged in the Grayscale case.
Why Spot Bitcoin ETFs Face Hurdles
- Regulatory Concerns: SEC cites potential market manipulation.
- Legal Precedents: Courts have questioned the SEC’s rejections (e.g., Grayscale).
"A 2x leveraged Bitcoin futures ETF trading while spot ETFs are denied seems contradictory." — James Seyffart, Bloomberg Intelligence
Market Reactions and Competitor Movements
Recent Withdrawals
- Direxion: Pulled its Bitcoin Strategy Bull 2X Shares application.
- ProShares: Withdrew UltraBitcoin Strategy ETF filing.
Active Applications
- Valkyrie: Seeking approval for its Bitcoin Futures Leveraged Strategy ETF (BTFD).
FAQs
Q: What is BITX?
A: The first leveraged Bitcoin futures ETF offering 2x daily performance.
Q: Why hasn’t the SEC approved a spot Bitcoin ETF?
A: Concerns over market manipulation and exchange safeguards.
Q: How does BITX differ from spot ETFs?
A: BITX tracks futures contracts, not the actual Bitcoin price.
Q: Are other leveraged ETFs in development?
A: Valkyrie’s BTFD is pending SEC approval.
Final Thoughts
The approval of BITX signals cautious SEC openness to crypto derivatives, while spot ETFs remain contentious. With BlackRock’s influence, the landscape may shift—but regulatory hurdles persist.
👉 Learn more about Bitcoin futures
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7. Valkyrie