Being a 2x leveraged ETF, BITX can help investors multiply their profits twice as fast as without leverage.
The first leveraged bitcoin futures exchange-traded fund (ETF) has received approval from the US Securities and Exchange Commission.seconds, The ETF, Volatility Shares 2x Bitcoin Strategy (BITX), will be launched on the Chicago Board Options Exchange (CBOE) BZX exchange on Tuesday, June 27.
ETFs can be traded on exchanges like stocks, and their prices often change on the same day they are bought and sold. There are two main types of bitcoin ETFs: bitcoin futures and Bitcoin spot price. The approval of a futures ETF will give investors exposure to bitcoin without having to invest in the actual asset.
Although many in the crypto industry are happy with the introductions, some are concerned about the order in which they are being provided. He wonders why a leveraged futures product like BITX is being introduced ahead of traditional spot ETFs.
Nate Geraci, president of The ETF Store, is one of those who believe spot ETFs should have been preferred. Expressing his thoughts about the announcement, he made the following comments in a tweet.
When we look back on the bitcoin ETF saga in 5 or 10 years, this will be one of the most ridiculous aspects…
The first 2x leveraged futures product to launch before a straight spot ETF.
Wild.
— Nate Geraci (@NateGeraci) 23 June 2023
BITX being a 2x leveraged ETF could easily mean that investors would grow their profits twice as fast as without leverage. On the other hand, their chances of losing money also double in case the market conditions turn less favourable. Thus, as it provides more profit, it also increases the potential for loss.
Expressing its views regarding the risks involved in trading leveraged products, the S.E.C. where did it go He:
“Funds present different risks than other types of funds. The Fund is not suitable for all investors and should only be used by knowledgeable investors who understand the consequences of seeking daily leveraged (2x) investment results, including the effect of compounding on the Fund’s performance.
Approval Of bitx yes isGood News For cryptocurrencyIndustry
Together sec various lawsuits against crypto companies, Involved Recent trial Of binance And coinbase, One can conclude That SEC’s President, Gary Gensler, is criticized Cryptocurrencies. However, recent updates may offer a different perspective on how regulatory bodies view cryptocurrencies.
Eric Balchunas, senior ETF analyst at Bloomberg, shares his thoughts. a tweetSaying:
“The 2x Bitcoin ETF $BITX goes into effect, set to launch on Tuesday. I suspected this would happen but it looks like it’s official. Could this be an early sign of the SEC going soft? After the $BITO launch I believe they retraced 2x the earlier filers.”
Approval can affect how investors view the industry, attract more of them and make the market more volatile. While it is too early to conclude how the SEC views cryptocurrencies, this news is a step in the right direction for the crypto industry.
BTC price surges after Bitx news release
This news affected the price of bitcoin, which reached $31,450 shortly after its release on Friday, June 23. This figure represents the highest price reached in a year. This is up 5% from the day before’s close of $29,890. The sudden rise in prices signals investor confidence in crypto and the market has received this news well.
Temytop is a writer with over four years of experience writing in various fields. He has a special interest in the Fintech and Blockchain sectors and enjoys writing articles in those fields. He holds bachelor’s and master’s degrees in linguistics. When he is not writing, he trades forex and plays video games.
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