Financial leverage Exchange Traded Fund (ETF) provider, Direxion, has filed an application for a special Bitcoin ETF product with the United States Securities and Exchange Commission (SEC) in order to ride on the growing anticipation from investors about similar products. Per the filing, the product is named Direxion Bitcoin Strategy Bear ETF, and it is set to maintain short exposure to bitcoin futures contracts issued by the CME exchange.
While maintaining similarity with flagship ETF products like the one from ProShares that was finally approved by the market regulator in the past week in that it will not invest directly in Bitcoin, the Direxion Bear ETF is a notable deviation from the norm. The filing reveals that the ETF will short Bitcoin futures when the price of the premier digital currency is falling, as well as in parallel markets or in periods of bull runs.
“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 Bitcoin ETF: Unfit for Risk-Averse Investors
Direxion is very forthright with its marketing strategy even right from its ETF filing as it warns investors not to invest in its products if they do not have the appetite to lose money.
“There is no assurance that the Fund will achieve its investment objective and an investment in the Fund could lose money. No single Fund is a complete investment program,” the filing reads
The Direxion Bitcoin Strategy Bear ETF is also billed to invest in other bitcoin futures ETFs or money market funds, deposit accounts, or short-term debt instruments. The company remains one of the first applicants of a Bitcoin ETF product, however, the company has not made any attempt to submit a filing in the past three years since its previous efforts yielded no fruits.
Following the filing, the SEC is expected to review Direxion’s application within 75 days before it is bound to start trading in public markets.
The Direction Bitcoin ETF product is a clear indication that product designers are set to be created with how they seek to approach the market, pending when the SEC will be comfortable to approve an actual Bitcoin ETF.
The asset under question, Bitcoin (BTC) is currently seeing a bad day in what seems like an encompassing crypto market price correction. The premier cryptocurrency is down by 5.45% to $59,091.45 per data from CoinMarketCap
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