Valkyrie Leveraged Bitcoin Futures ETF takes inspiration from TradFi memes

In its latest futures-based exchange-traded fund (ETF) filing, Valkyrie Funds uses one of the popular memes of the Twitter financial community, known as “fintwit,” to grab attention and interest.

On May 16, the investment firm filed a new application for a Bitcoin (BTC) futures-based ETF listed on the Nasdaq with the ticker symbol “BTFD.”

Both of Valkyrie’s Bitcoin-focused funds have no direct exposure to Bitcoin itself; instead, they invest in Bitcoin futures traded on the Chicago Mercantile Exchange. Bitcoin futures are financial contracts that allow investors to speculate on Bitcoin’s future price movements. These contracts oblige the buyer to buy Bitcoin or the seller to sell Bitcoin at a predetermined price on a specific future date. Unlike trading Bitcoin – where the digital asset itself is owned and held – Bitcoin futures allow traders to speculate on Bitcoin’s price without directly owning it.

Originally intended for the first fund, the suggestive ticker reportedly underwent a change by the company in October 2021.

Unlike the company’s existing block trading facility (BTF) fund, this newly proposed fund will provide leverage, allowing speculators to increase their exposure to the dominant cryptocurrency. BTF is an actively managed ETF available through Nasdaq that primarily invests in bitcoin futures contracts.

So far, the market has witnessed the release of four different Bitcoin futures-based exchange-traded funds (ETFs). The first, known as ProShares Bitcoin Futures ETF, was launched in October 2021.

So far, the Securities and Exchange Commission (SEC) has denied several attempts to introduce Bitcoin spot ETFs or funds that offer direct exposure to the dominant cryptocurrency, citing concerns about potential market manipulation in the Bitcoin market.

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Grayscale, a digital asset manager, is currently embroiled in a lengthy legal dispute with the SEC as it attempts to convert its struggling Grayscale Bitcoin Trust product (GBTC) into a mock Bitcoin ETF. The investment firm criticized the Commission’s decision to allow futures-based ETFs instead of spot ETFs, deeming it “illogical”.

In March, the judges presiding over the dispute between the two entities in the U.S. (U.S.) Court of Appeals for the DC Circuit ruled that the SEC “must provide a thorough explanation” regarding its understanding of the connection between Bitcoin and Bitcoin. futures and the spot price of Bitcoin.

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