The New York Stock Exchange has asked the Securities and Exchange Commission to allow it to list five bitcoin-related exchange-traded funds (ETFs) on one of its markets, according to an SEC filing. The ETFs were created by Direxion Asset Management to track bitcoin futures trading.
While they are not tied to the price of bitcoin itself, the funds aim to multiply investor returns when compared to the underlying market, the filing said. The instruments, named 1.25X Bull Fund, 1.5X Bull Fund, and 2X Bull Fund, will leverage “investment results (before fees and expenses) that correlate positively to either 125%, 150%, or 200% the daily return of the target benchmark,” the filing said.
For each fund, that means a 1 percent rise in the price of bitcoin futures should result in a per-share gain of between 1.25 percent and 2 percent, depending on which Bull Fund is used. However, the potential for higher rewards also comes with higher risk: If the price of bitcoin falls, investors’ losses would be multiplied by 1.25.
As such, the funds are not intended for long-term investing, the filing said. The NYSE has issued several filings related to the bitcoin market, including for bitcoin-related ETFs, with the SEC.
If the SEC approves this request, the five ETFs will be listed on Arca, a secondary marketplace on the NYSE. The news was first reported by Business Insider and Reuters. Read more from cnbc.com…
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