Direxion Files for Short Bitcoin Futures ETF

Investment firms are getting creative after last week’s watershed bitcoin ETF launch.

Oct 26, 2021 at 9:57 p.m. UTC
Updated Oct 27, 2021 at 1:16 p.m. UTC

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Danny is CoinDesk's deputy business editor. He owns BTC, ETH and SOL.

Exchange-traded fund (ETF) issuer Direxion wants to short the price of a bitcoin futures contract.

According to a filing with the U.S. Securities and Exchange Commission (SEC) on Tuesday, the Direxion Bitcoin Strategy Bear ETF will maintain short exposure to bitcoin futures contracts issued by the Chicago Mercantile Exchange. The product won’t directly invest in bitcoin.

Shorting is a bet that the price of something – in this case, bitcoin futures contracts – will go down over a certain period of time.

The ETF might also invest in other bitcoin futures ETFs or money market funds, deposit accounts or short-term debt instruments.

“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.

This is Direxion’s first bitcoin ETF filing in three years, after the SEC rejected past efforts.

Direxion isn’t the only issuer hoping to put a creative spin on bitcoin futures ETFs. On Tuesday, Valkyrie Investments filed to offer an ever-so-slightly leveraged bitcoin futures ETF. Valkyrie was one of two firms to launch the first bitcoin futures ETF products last week.

Although the SEC has proven receptive to a narrow class of bitcoin ETFs – after years of stonewalling – it has not yet weighed in on these more ambitious follow-ups. The agency has 75 days to respond before Direxion’s ETF would automatically take effect.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

CoinDesk - Unknown

Danny is CoinDesk's deputy business editor. He owns BTC, ETH and SOL.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

CoinDesk - Unknown

Danny is CoinDesk's deputy business editor. He owns BTC, ETH and SOL.

Trending

1
CoinDesk - Unknown
How the US Can Establish Itself as a Crypto Leader

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

CoinDesk - Unknown
2
CoinDesk - Unknown
No, the UK Is Not Going to Make USDC and USDT Legal Tender

For “legalize” read “regulate.”

For “legalize” read “regulate.”

CoinDesk - Unknown
3
CoinDesk - Unknown
Thoughts From Davos

The crypto industry showed up in force at the World Economic Forum’s annual meeting.

The crypto industry showed up in force at the World Economic Forum’s annual meeting.

CoinDesk - Unknown
4
CoinDesk - Unknown
Bitso, primer unicornio cripto de América Latina, despide a 80 empleados

El exchange, que tenía más de 700 empleados antes de los recortes, cuenta con cuatro millones de usuarios en la región.

El exchange, que tenía más de 700 empleados antes de los recortes, cuenta con cuatro millones de usuarios en la región.

CoinDesk - Unknown