Valkyrie presents BTFX: a new 2x leveraged Bitcoin futures ETF to compete with BITX

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Valkyrie has recently introduced the 2x leveraged Exchange-Traded Fund (ETF) based on Bitcoin futures. 

The new fund, known as BTFX, will compete with the Volatility Shares Strategic Bitcoin 2x Exchange-Traded Fund, known as BITX. Let’s see all the details below. 

Valkyrie introduces an innovative exchange traded fund (ETF) on Bitcoin futures

As anticipated, last Thursday, Valkyrie introduced a new Bitcoin-based leveraged product. 

Specifically, aiming to offer a daily performance double compared to a Bitcoin futures index, thus consolidating its presence in leveraged products linked to Bitcoin.

The fund, called Valkyrie Bitcoin Futures Leveraged Strategy ETF (BTFX), is an Exchange-Traded Fund (ETF) based on Bitcoin futures with leverage, designed to generate a daily performance equal to twice the index. 

This is designed to evaluate the performance of the CME Bitcoin futures market, with a scheduled roll-over, as specified by Valkyrie in a press release.

The introduction of BTFX follows by one month the approval by the SEC of a series of spot Bitcoin ETFs, including those of Valkyrie, BlackRock and Grayscale.

A significant step after years of efforts by the cryptocurrency industry to obtain approval for such instruments.

Leah Wald, CEO of Valkyrie, stated the following: 

“The launch of BTFX highlights our commitment to providing innovative options for investors to access Bitcoin and the digital asset ecosystem. With Bitcoin currently at the center of attention, traders and investors are looking for financial instruments to participate in this space, and as leaders in digital asset-focused ETFs, we aim to provide an excellent fund.”

The new fund competes with the Volatility Shares 2x Bitcoin Strategy ETF, known as BITX, according to Bloomberg’s senior ETF analyst Eric Balchunas in a post on X Thursday.

Balchunas observed: 

“Valkyrie launches today a 2x Bitcoin Futures ETF $BTFX that will compete with $BITX which already has 350 million dollars. That being said, there are about 15 leveraged btc spot ETFs in the registration phase, one or two of which will probably take off and make it harder for those futures.”

Valkyrie: performance and competitiveness

The co-founder of Valkyrie, Steven McClurg, recently discussed with Blockworks about their Bitcoin ETF, launched in collaboration with BlackRock, Fidelity, and other partners in January. 

In particular, McClurg shares that the managed assets of their ETFs have doubled in the last two weeks, highlighting a significant increase of 100%.

This result has also generated attention for other products offered by Valkyrie, such as those associated with Bitcoin miners.

When it comes to fees, McClurg highlights Valkyrie’s decision to lower its costs, trying to maintain a competitive positioning within the Bitcoin ETF market. 

Furthermore, McClurg explains that Valkyrie has taken this move into consideration regarding the increasing competition. He therefore emphasizes the importance of maintaining fees between 20 and 35 basis points, avoiding becoming an “outlier in commissions.”

Cybersecurity is a crucial aspect for Valkyrie, and McClurg reveals that the company is the only one to announce a secondary partnership for the custody of Bitcoin for the ETF. 

Explain that storing Bitcoin requires a multiple approach and that it is essential not to keep all coins in a single wallet. McClurg emphasizes their focus on security, considering it a priority when it comes to managing Bitcoin.