Valkyrie Investments, the second company to offer a Bitcoin-based exchange-traded fund in the US, has now filed for approval of an ETF that would outperform the cryptocurrency.
Valkyrie XBTO Levered BTC Futures ETF would use leverage to deliver 125% of the return of Bitcoin, according to its filing with the Securities and Exchange Commission.
Like other Bitcoin ETFs in the US, the fund would use Bitcoin futures to track the price of the crypto, rather than owning Bitcoin itself.
Securities and Exchange Commission approval of the first Bitcoin-based funds for trading in the US after years of waiting was a landmark for crypto, and many other ETFs may be on the way. There’s no timeline or guarantee when this one might launch. We’ll update this page as more information become available
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Launched by Valkyrie, this leveraged fund will invest in Bitcoin futures like the other Bitcoin-based funds now trading in the US.
This means investors don't actually own the underlying asset itself but rather are betting on the future value of Bitcoin.
But the futures and derivatives strategy would seek to return 125% of any Bitcoin price move, like other leverage funds. If Bitcoin rose $1, the ETF price would rise $1.25.
We will update this page as more details become available.
Jeff Yew
Founder & CEO at Monochrome Asset Management
For everyday investors, accumulating physical Bitcoin comes with added hurdles of custody and operational risks."Bitcoin as a technology is battle-tested, but there is an inherent operator's risk when self-acquiring, holding and managing a bitcoin position even for the most experienced digital native, hence there's a market for those who prefer a safe pair of hands to manage their investment in exchange for a small management fee.
"Investing in a Bitcoin ETF offers investors the benefits of a safe yet low barrier to diversifying their portfolio into the asset class since it's a well understood financial product for most investors."
This Valkyrie fund would allow bullish investors to gain exposure to Bitcoin without having to own the underlying asset itself.
Investors instead own shares of an ETF investing in future contracts.
This makes the ETF suitable for investors who want to gain exposure to Bitcoin without having to go through the troubles of owning the underlying asset.
Due to this it is well suited for retail investors who might not understand the complexities around investing in crypto assets.
Given the leverage, though, it is suited for those comfortable with added risk. While it moves up more quickly than Bitcoin when the price goes up, it also moves down more quickly than Bitcoin if there's a drop.
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisors, so do your own due diligence to understand the risks before you invest.
Paid non-client promotion. Finder does not invest money with providers on this page. If a brand is a referral partner, we're paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Learn more about how we make money.
Finder is not an advisor or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
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