Direxion and GraniteShares have joined the growing roster of issuers looking to launch bitcoin ETFs after futures for the cryptocurrency began trading last week.
Direxion, known for its leveraged and inverse ETFs, is planning to roll out the Direxion Bitcoin ETF, which will be actively managed.
The prospectus says the fund will look to outperform the total return of bitcoin futures contracts over the course of a market cycle. It will do so by investing in CME- and Cboe-listed bitcoin futures and related swaps contracts, and by maintaining an actively managed portfolio of short-term high-quality government and corporate fixed-income and cashlike vehicles.
The fund is structured as a 1940 Act fund, and its investment in futures contracts will be held in a Cayman Islands subsidiary, which can represent up to 25% of the fund’s total assets. Structuring the fund this way allows investors to avoid having to deal with K-1 tax forms.
The filing did not include a ticker or expense ratio, but it did indicate the fund will list on the NYSE Arca.
GraniteShares, primarily known for its commodity funds, has filed for the GraniteShares Bitcoin ETF and the GraniteShares Short Bitcoin ETF, which will both invest in front-month bitcoin futures. The funds, structured as commodity pools, are passively managed, and will simply hold long or short exposure positions in bitcoin futures.
The products will be listed on the Cboe exchange. Cboe Global Markets is the parent company of ETF.com. The filing did not include expense ratios or tickers.
GraniteShares and Direxion join the likes of REX ETFs, VanEck and First Trust in looking to create bitcoin-based funds. However, GraniteShares is the only firm among the latest filings looking to launch a product structured as a commodity pool.
All of the other newly filed products are structured as 1940 Act funds. ProShares previously filed for a futures-based bitcoin fund in September, well before the start of futures trading.
The filing did not include tickers or expense ratios.
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