The Direxion Bitcoin Strategy Bear exchange-traded fund has decided to run against the crypto bull and is planning to offer the shorting option to CME Bitcoin futures contracts, which is revealed in a filing with the Securities and Exchange Commission (SEC) yesterday. Nevertheless, the phrase ‘higher the risk the higher the return’ fits correctly for the Direxion fund, which is betting against the Bitcoin ETF, exposing the short sellers to numerous risks.
According to Bloomberg, shorting the Bitcoin ETF trend also brings forth the potential for short sellers to be wiped out, along with having to face the issue of Bitcoin’s high volatility. Furthermore, the filing also noted risks of liquidity and issues around the futures roll.
“If you are not prepared to accept significant and unexpected changes in the value of the Fund and the possibility that you could lose your entire investment in the Fund you should not invest in the Fund,” Bloomberg quoted from the filing report.
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