Direxion Files Application for ETF Futures for Bitcoin and Ethereum

Europe's largest ETF investment firm, Direxion, has filed an application for leveraged ETFs for BTC and ETH, joining a race of cryptocurrency ETFs alongside 6 other companies that also filed applications this week.

Direxion Files Application for ETF Futures for Bitcoin and Ethereum

According to documents submitted to the U.S. Securities and Exchange Commission (SEC) on August 2nd, the ETF giant Direxion has filed an application to register futures contracts for Bitcoin and Ethereum. If approved, the company plans to develop ETF Futures for other assets in the future.

Direxion's move comes in a week when 6 other companies also submitted applications for ETF Futures for ETH, as reported by Coin68, including: Volatility Shares, Bitwise, Roundhill, VanEck, ProShares, and Grayscale.

Currently, the SEC is reviewing over half a dozen applications for Bitcoin spot ETFs, notably from the financial giant BlackRock, which has previously had 575/576 ETF funds approved by the SEC.

To date, the SEC has not approved any Bitcoin spot ETFs, while allowing Bitcoin Futures ETFs with 2x leverage for the first time in the U.S. This contradictory action has drawn criticism from Grayscale's lawyers due to the inherently higher risks associated with leveraged products.

In practice, the SEC has previously approved Bitcoin futures ETFs several times in the past, such as products from ProShares, Valkyrie, and VanEck at the end of 2021. Observers therefore predict that Bitcoin spot ETF products are likely to arrive sooner or at least be positively considered by the SEC.

However, it is important to reiterate the SEC's viewpoint that derivatives markets have sufficient safeguards, whereas spot Bitcoin trading is fraught with risks of fraud and manipulation.