The ProShares Bitcoin Strategy ETF began trading on 19th October this year and witnessed more than $900M shares traded to investors on the very day. Several speculators mentioned that investors hanged for this chance for a considerable period and could not help control their excitement. It is justified to consider that the respective approval has stimulated many issuers to struggle for additional products to assist the BITO.
For example, Direxion (an issuer), only applied for the approval of two diverse products. The firm created the filing to develop a mechanism to help the investment in contracts that help minimize the price of Bitcoin. The respective product will provide arranged contracts (having short exposure) on the Chicago Mercantile Exchange (CME). As per the firm, the investment will be made in the market funds, short-term debt mechanisms, BTC futures, as well as deposit accounts.
The safety of funds regarding investment
Although several people are pushing for BTC ETFs, it by no means signifies that the depositors do not care about investment. It has also been disclosed by Direxion that there could be some hazards in the price of assets existing in the approaching fund. As per the statement thereof, the value of the investment might probably diminish to zero at some time and could waste the depositors’ heard-earned money. The caution might seem outstanding however can move the depositors away from utilizing the fund. Eric Balchunas, while giving another statement, has revealed that Direxion already has a Bitcoin future ETF named BITI which is operational in Canada. Nonetheless, the dreadful thing is the notion that no significant progress is being witnessed on the behalf of the ETF, although Eric pointed out that it is functional sometimes but fails for the others.
Uncertainty in the approval of Direxion’s Bitcoin ETF
In advance of 2021’s filing of ETF, the firm struggled to acquire approval during 2018 however it failed. Several organizations were submitting filings under the SEC to obtain approval nevertheless they could not make it, including Direxion. The Commission did not make any hurry to provide approval for any, and due to this, a huge controversy was created throughout the community of cryptocurrency. Another such filing has been submitted recently by Valkyrie, targeting to get a “leveraged BTC futures ETF” approved by the SEC. A Bitcoin exposure of up to 1.25X will be provided through this fund to the investors.