Defiance, a fund management company, has published a prospectus highlighting the unique qualities and risks associated with leveraged investments. It cautions investors about the increased volatility and risk in comparison to non-leveraged options. The company acknowledges the possibility of underperformance in its ETF, especially if the value of Ether futures remains stagnant or sees minimal gains over a prolonged period. This makes it suitable for investors actively managing their portfolios.
Leveraged Crypto ETFs have seen significant advancements in recent times. Defiance recently filed for a 2X Short MSTR ETF, which offers a leveraged short position on MicroStrategy, a company often considered a bet on Bitcoin. However, this move has been met with criticism from industry experts like Blockstream CEO Adam Back. Following this, ProShares has also filed for their own 2X and -2X spot Ether ETFs, indicating a growing interest in leveraged crypto offerings.
The launch of Defiance’s 2X Ether Strategy ETF coincides with the SEC’s approval of Ether futures ETFs for public trading in October. This has led to a surge in applications from various asset managers, following the trend set by the approval of the first 2X Bitcoin futures ETF in June. While the initial Ether ETFs saw lower trading volumes compared to Bitcoin ETFs, their approval signified a potential shift in the SEC’s stance on crypto ETFs. As a result, Bitcoin spot ETFs were also introduced, attracting significant investor attention and inflows.
Currently, investors are eagerly waiting for the SEC’s decision on ETH spot ETFs. However, there is skepticism about their imminent approval. The featured image is courtesy of Freepik, and the disclaimer should be referred to for further information.
