Valkyrie Files for Leveraged Bitcoin Futures ETF

Valkyrie made history last week as the second issuer to bring a bitcoin futures-based ETF to market, now it seeks approval for a leveraged product.

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key takeaways

  • Valkyrie files for a leveraged bitcoin futures ETF four days after launching its futures only fund
  • The fund will provide 1.25x exposure to the bitcoin reference rate

Four days after its bitcoin futures exchange-traded fund made its Nasdaq debut, Valkyrie Investments is already after another bitcoin futures-based fund, this time with leveraged exposure. 

The investment firm filed the Valkyrie XBTO Levered BTC Futures ETF prospectus on Tuesday morning. The fund, which intends to trade under the ticker BTFX, will provide 1.25x exposure to the bitcoin reference rate. It will hold futures, swaps, options and forwards. 

“The Fund presents different risks than other types of funds,” the filing read. “The Fund may not be suitable for all investors and should be used only by knowledgeable investors who understand the consequences of seeking daily leveraged (1.25x) investment results, including the impact of compounding on Fund performance.” 

Valkyrie hinted at future fund launches shortly after BTF, its bitcoin futures ETF which did $10 million in trades in the first few minutes of the session, began trading last Friday. BTF was the second fund of its kind to begin trading. ProShares Bitcoin Strategy Fund (BITO) launched on Tuesday and raked in $1 billion in assets under management in the first two days.  

“I think spot is quite a bit of a ways away, but we do have some creative things that we’re looking at doing,” Steven McClurg, chief investment officer at Valkyrie, told Blockworks Friday, referring to a spot-based ETF. “You’ll probably see them filed in November and hopefully launching in the beginning of next year.” 

The news comes as VanEck’s futures-based fund launch is delayed yet again. The issuer filed a new date on Tuesday stating that the filing is expected to become effective on Wednesday, October 27, meaning the fund may start trading on Thursday or Friday. VanEck’s management fee will be 0.65%, as opposed to Valkyrie and ProShare’s fee of 0.95%. 

“VanEck is excited to offer a long-awaited bitcoin exchange traded product to the U.S. market,” said Ed Lopez, Head of ETF Product at VanEck. “We were the first asset manager to file for a bitcoin futures ETF back in 2017, and we are offering what would be most competitively priced ETF in the category when we come to market.”

The issuer declined to comment on the reason for the delayed launch.

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