Volatility Shares Trust to Debut Leveraged Bitcoin Investment Vehicle

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The Volatility Shares Trust, renowned Delaware statutory trust, has applied to the United States Securities and Exchange Commission (SEC) for permission to list shares of a leveraged Bitcoin futures ETF.

Volatility Shares Brings “2x Bitcoin Strategy ETF”

On June 23, the business filed a form 8-A with the SEC, indicating that it is almost ready to introduce an investment vehicle that the regulator would classify as a class of securities.

According to the registration statement, the Volatility Shares are designated as a “2x Bitcoin Strategy ETF,” implying that it would provide leveraged exposure to Bitcoin equal to two times the daily performance of the S&P CME Bitcoin Futures Daily Roll Index.

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As the SEC had not yet rejected the Volatility Shares application, the company’s official website indicated that trading will begin on June 27. Furthermore, it was stated in a separate SEC Form N-1A filing for the listing of shares of the leveraged Bitcoin futures ETF on the CBOE BZX Exchange that neither the SEC nor the U.S. Commodity Futures Trading Commission had “approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus.”

Challenges in Establishing a Bitcoin ETF

Notably, it is becoming ever more challenging to establish a Bitcoin ETF with the SEC. The regulator has turned down several spot BTC ETF applications, including Grayscale’s. 

The SEC rejected Fidelity’s proposal for the Wise Origin Bitcoin Trust Spot ETF at the start of 2022. The SEC also dismissed WisdomTree’s request for a spot BTC ETF in October of last year, citing issues with insufficient investor safeguards and fraud.

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However, starting in 2021, the U.S. financial regulation started accepting ETFs linked to BTC futures, which includes Valkyrie and ProShares. The same authority also rejected Cathie Wood’s ARK 21Shares’ application to launch a spot BTC ETF earlier this year. Unfortunately, the investment manager’s proposal had been turned down twice in a row.

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