Bitcoin Short: ETF Firm Rex Eyes Downside Potential With Fund Filing
Connecticut-based REX ETF wants to offer investors a way to short the bitcoin market, according to new SEC filings.
A new bitcoin investment fund launched last week in the US is part of a wider strategy that includes a planned effort to offer institutional investors a way to short the market.
Last week, CoinDesk reported that REX ETF, an investment firm based in Connecticut, had launched a fund that plans to invest primarily in bitcoin futures and other derivatives without actually buying direct exposure to the cryptocurrency. In announcing the move, REX indicated that it would seek to launch multiple investment products built around the tech.
Additional public filings reveal that at least one of those products is already in the pipeline.
from last week, the "REX Short Bitcoin Strategy ETF" will be similar in scope – relying on financial derivatives of bitcoin and not the cryptocurrency itself – but with the aim of shorting the market.
When short selling, investors typically borrow an asset or security and sell it in anticipation of a lower buy-in price later, making a profit on the difference.
Here's how the REX ETF filing explains the investment fund's plan:
As previously reported, the launch comes amid growing interest in the launch of such products – as well as the hope to capture some of the demand coming from institutional investors.
Options exchanges in the US like CBOE are moving to launch derivatives trades – and others are eyeing the intellectual property that could underlie future offerings as well.
Bear and bull image via Shutterstock
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.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.