Being a 2x leveraged ETF, BITX can help investors increase their earnings twice as fast as they would without the leverage.
The first Bitcoin futures exchange-traded fund (ETF) has received approval from the US Securities and Exchange Commission (SEC). The ETF, the 2x Bitcoin Equity Volatility Strategy (BITX), will be launched on the Chicago Board Options Exchange (CBOE) BZX Exchange on Tuesday, June 27.
ETFs can be traded on exchanges like stocks, and their prices often change on the same day they are bought and sold. Bitcoin ETFs are of two main types: Bitcoin futures and Bitcoin spot. The approval of futures ETFs will expose investors to bitcoin without having to invest in the actual asset.
While many in the cryptocurrency industry are happy with this introduction, some are concerned about the order in which it is given. They wonder why a leveraged futures product like BITX is being offered before a traditional ETF.
ETF shop chief Nate Gerache is one of the people who think the ETF should have been prioritized. Expressing his views on the ad, he made the following comment in a tweet.
When we look back on the epic Bitcoin ETF 5 or 10 years later, this will be one of the most ridiculous aspects…
Launching a 2x leveraged futures product ahead of a direct ETF.
Wild.
– Nate Geraci (@NateGeraci) June 23, 2023
BITX being a 2x leveraged ETF can mean that investors will increase their earnings twice as fast as they would without the leverage. On the other hand, the chances of losing their money in the event of less favorable market conditions are also multiplied. Thus, since it provides greater profit, it also increases the chances of losses.
In expressing their thoughts on the risks involved in trading leveraged products, the Securities and Exchange Commission advertiser which – which:
“The fund presents different risks than other types of funds. The fund is not suitable for all investors and should only be used by informed investors who understand the consequences of seeking daily investment results with (2x) leverage, including the impact of complexity on fund performance.”
approval to Bitex is GOud news to Cryptocurrency IIndustry
with Securities and Exchange Commission Various lawsuits against encryption companies, included at recent days prosecution to binance And coinbase, One might conclude that Securities and Exchange Commission president, Gary Gensler, Criticize Digital currencies. However, recent updates may provide other perspectives on how the cryptocurrency regulator views it.
Eric Balchonas, senior analyst for the ETF at Bloomberg, expressed his thoughts in Tweetsaying:
“2x bitcoin ETF $BITX is now live and set to launch on Tuesday. I was skeptical it would happen but it looks like it’s official. Could this be an early sign of an SEC lightening? After launching $BITO, I think they pulled 2x filings at a time. ex”.
The approval could affect how investors view the industry, attracting more of them and making the market more volatile. While it may be too early to conclude how the SEC views cryptocurrencies, this news is a step in the right direction for the crypto industry.
BTC price rose after the BITX news release
The news affected the bitcoin price, which rose to $31,450 shortly after its release on Friday, June 23. The number represents the highest price it has reached in a year. It also represents a 5% increase from the closing price of $29,890 the day before. The sudden price surge indicates investor confidence in cryptocurrencies and the news has been well received by the market.
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Temitope is a writer with over four years of writing experience in various fields. He has a particular interest in the fintech and blockchain spaces and enjoys writing articles in those areas. He holds a Bachelor’s and Master’s degrees in Linguistics. When he’s not writing, he’s trading forex and playing video games.
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