While U.S. regulators have finally warmed up to Bitcoin futures-backed exchange-traded funds, it appears that more complex derivatives-based funds are a bridge too far for now.
Direxion, a provider of financial products known for its leveraged ETFs, pulled a request late Tuesday to launch the Direxion Bitcoin Strategy Bear ETF. The firm had submitted the
The withdrawal follows a similar move by Valkyrie, which was the second issuer to launch a U.S. Bitcoin futures ETF last month. Late last week, it dropped its
The first U.S. Bitcoin ETFs launched last month, nearly a decade after the first applications were filed. The fact that the funds track Bitcoin futures — rather than physically hold the cryptocurrency — allowed products from ProShares and Valkyrie to launch after SEC Chair Gary Gensler signaled he’d be more open to that structure. However, it’s clear that regulators aren’t ready to greenlight any exotic crypto ETFs yet, according to Bloomberg Intelligence.
“While it does seem a bit inconsistent given their acceptance of the Bitcoin futures markets, it isn’t surprising and is likely part of a ‘baby steps’ regulatory mindset,” Eric Balchunas, an analyst with Bloomberg Intelligence, said of the SEC’s request. “I bet we will see one someday, but only when they feel ready.”
Direxion didn’t immediately respond to a request for comment.
It’s not just crypto. In early October, Gensler
