Content adapted from this Zerohedge.com article : Source
In a move that will certainly not end well for investors, the New York Stock Exchange has asked the SEC to approve five ETFs including 2x leveraged and inverse flavors, linked to Bitcoin futures - which launched in December on the CME amd Cboe, according to a Thursday filing, which is in line with what we said mentioned in August, "_we suspect a Bitcoin Futures ETF may actually occur before a Bitcoin ETF." _
The five "derivative of derivative" funds are as follows:
- Direxion Daily Bitcoin 1.25X Bull Shares
- Direxion Daily Bitcoin 1.5X Bull Shares
- Direxion Daily Bitcoin 2X Bull Shares
- Direxion Daily Bitcoin 1X Bear Shares
- Direxion Daily Bitcoin 2X Bear Shares
The target Bitcoin benchmark will be calculated as the last sale price published by the CME or CBOE on or before 11:00 a.m. EST, and "should not be expected to track the performance of the target bencvhmark for any period longer than one business day."
Additionally, while each Fund will seek daily correlation to the target benchmark, it should not be expected to track dollar for dollar the spot price of bitcoin because the Fund will invest in Bitcoin Futures Contracts rather than directly in bitcoin, and the spot price movements of bitcoin may not correspond directly to price movements of the Bitcoin Futures Contracts
This means that a 1 percent gain in the price of bitcoin futures would result in a gain of between 1.25% and 2% for the bulish funds, and a 1-2% loss on bear shares, although due to the theta associated with the inherent leverage, the securities will ultimately see their value evaporate over time.
Of course, as the filing explicitly warns, "the funds are not intended for long-term investing." Which means hang on to your hats as the world's most volatile asset (besides electricity) becomes even more volatile.
While no official tickers have been proposed, some have already floated suggestions:
hope they get good ticker names like the other Direxion ETFs. I propose
1X Bull = $HODL
2X Bull = $MOON
2X Bear = $REKT— ant123 (@antron_iii) January 7, 2018
Just like with the underlying futures, during periods of extreme volatility, the NYSE will halt trading in the ETFs pursuant to existing rules that govern listed securities, as well as "during the day in which interruption to the dissemination of the IFV or the value of the Bitcoin Futures Contract occurs. If the interruption to the dissemination of the IFV or the value of the Bitcoin Futures Contract persists past the trading day in which it occurred, the Exchange will halt trading."
Assuming SEC approval, the five new ETFs will trade on the NYSE's Arca, a secondary marketplace. The exchange said the products would "enhance competition among market participants, to the benefit of investors and the marketplace," according to _Business Insider. _
This filing by the NYSE is the latest indication that Wall Street (cough Jamie Dimon) is coming to grips with the fact that they can't simply wish Bitcoin out of existence.
In June, the CTFC approved Bitcoin options, issuing a license to LedgerX allowing it to create the first swap-execution facility for the clearing and settlement of bitcoin options, a decision that will likely attract more traditional hedge funds and CTAs to trade crypto.
In early August, chatter over Bitcoin ETF approval heated up - with analyst Spencer Bogart putting the odds of Bitcoin ETF approval at 75% within 18 months.
Things have changed. My odds of Bitcoin ETF approval within 18 months are WAY up.
Spencer Bogart (@CremeDeLaCrypto) August 2, 2017
In September, we reported that JP Morgan was buying Bitcoin ETFs in Europe on behalf of clients, using the Nasdaq's Bitcoin "Tracker One" ETN launched in 2015 - despite CEO Jamie Dimon calling it "a fraud" for stupid people, such as his daughter.
"It's a fraud. It's making stupid people, such as my daughter, feel like they're geniuses. It's going to get somebody killed. I'll fire anyone who touches it."
Then in November, French asset manager Tobam created the first **bitcoin-linked mutual fund, **"an unregulated Alternative Investment Fund," described as "the first of its kind in Europe" to allow qualified and institutional investors wanting to gain an exposure to the cryptocurrency to benefit from TOBAMs top-of-the league research and IT systems to track the value of investing in the Bitcoin.
**Silicon Valley has been gearing up for Bitcoin as well, **with companies such as Twitter founder Jack Dorsey's credit card processing venture, Square, announced that they were exploring adding Bitcoin to their platform - causing the cryptocurrency to surge in response.
...Weve found that [customers] are interested in using the Cash App to buy Bitcoin, the company said in a statement.
We're exploring how Square can make this experience faster and easier, and have rolled out this feature to a small number of Cash App customers. We believe cryptocurrency can greatly impact the ability of individuals to participate in the global financial system and we're excited to learn more here.
Last month, Craigslist also got in on the normalization of cryptocurrencies, adding the ability for sellers to advertise the fact that they accept digital currency:
In November, the world's largest online seller of gold, Apmex, began accepting Bitcoin. From the company's statement:
For more than 15 years, APMEX has been an industry leader and along the way has adapted to the growing needs of our customer base. As bitcoin becomes more popular and widely accepted as payment, we are thrilled to welcome the use of this cryptocurrency for buying Gold, Silver and other Precious Metals by integrating BitPay into our website.
Given what appears to be an unstoppable attraction to the Blockchain, Wall Street's eventual acceptance of cryptocurrencies was a foregone conclusion, despite even Jamie Dimon's opinion. Meanwhile, traders are firing up their engines as the market cap of the cryptocurrency space hits new all time highs every single day.
It is interesting to watch entities embrace the medium that ends up destroying them.
Cryptocurrency is the money of the internet. In other words, the internet came for to the world of money. And just like it did to the information and communication realms, it creates abundance. We now have more information than we can consume and more ways to communicate than we can use.
Also, the internet destroys whatever is standing when it enters a market. Newspapers and magazines use to be thriving...the internet put most out of business. Record companies and distributors were highly profitable. No longer. The same is true for video.
We will see the same thing in the financial arena. Give it 5 years and many of the existing financial structures will either be gone or downsized. The bankster hold on the world is quickly falling apart.
We are operating under a new model while the centralized structures are holding onto their old one.
It will fail...the internet promises that.
I recently heard that Visa has stopped allowing cryptocards from working. I'm uncertain of the specifics though I'd really like to know what can be done about that since if the SEC and wallstreet are allowing cryptos into their markets why would visa be declining cards?
I think A BTC ETF will really make a difference, unlike the futures. Day traders really like leveraged etf's, so I guess their wishes will be granted - the more comissions, the better. Cryptos will start seeing wide adoption soon enough. Just HODL, lol.
P.s, the tickers are ingenious !
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I think if you stole Jamie Dimon's cell phone, he secretly has a Coinbase account.
A very important topic I am grateful to you for the valuable information
A federal regulatory body for the first time gave green light on Friday to Wall Street financial firm CME to begin issuing bitcoin futures.
The Commodity Futures Trading Commission (CFTC) - the main federal trading regulator - was then traded on bitcoin futures contracts after six weeks of discussions, the Associated Press reported.
The company, which owns the Chicago Mercantile Exchange, said it would begin trading futures contracts for the first time to trade in that currency
On Wall Street
In its new step, the company complies with a process known as a "self-certification" under which it undertakes not to violate any of the federal securities laws when trading in that currency.
With this decision, some of the bitcoin markets underwent federal regulation in the US for the first time, and allowed bitcion trading to a larger group of investors and traders, who were reluctant to buy the virtual currency.
John Conlev, deputy governor of the Central Bank of Britain, said the bitcoin currency was not
In a size that poses a threat to the global economy, with the digital currency rising to a record high above 19k in a major trading platform. :D
Excellent post about bitcoin trading market and Cryptocurrency. Thanks for sharing such a good post.
Thanks for briefing so clearly and openly
I am surprised Jamie Dimon is still CEO
I believe the ETFs will drive up the price (and increase volatility) as the article stated. Its interesting bc Wallstreet will create derivatives / financial instruments for their favorite tokens/coins which might change the game for those coins (for better or worse), but other coins will stabilize in 2018 that arent in “that system.” If ETFs etc prove to be bad for the first wave of cryptos, will we see them created for the second wave? Then there is the fact that exchanges will become more and more user friendly (like coinbase) and when that happens, will anyone even want ETFs? I tend to think not, but we are in uncharted waters so buckle up!
Great news of Cryptocurrency @zer0hedge
I heard this that the CTFC approved Bitcoin options, issuing a license to LedgerX allowing it to create the first swap-execution facility for the clearing and settlement of bitcoin options, a decision that will likely attract more traditional hedge funds and CTAs to trade crypto.
In early August, chatter over Bitcoin ETF approval heated up - with analyst Spencer Bogart putting the odds of Bitcoin ETF approval at 75% within 18 months.
A 2x leveraged inverse bitcoin ETF, what could possibly go wrong?