Bitcoin’s Resurgence Spurs Fresh Push to Launch Leveraged ETFs

The race for the first leveraged Bitcoin exchange-traded fund is heating up as applications land amid a surge in cryptocurrency prices.

Direxion on Monday filed for the Direxion Daily Bitcoin Strategy Bull 2X Shares ETF, which would look to double the performance of the S&P CME Bitcoin Futures Index each day. That follows a ProShares application on Friday for the ProShares UltraBitcoin Strategy ETF, which would seek similar types of returns as Direxion’s proposed fund.

And they both come on the heels of Volatility Shares’s petition in late March to launch a product that would every day deliver two times the performance of a Bitcoin futures index.

“That initial filing opened the floodgates again,” said Todd Sohn, ETF strategist at Strategas. “It’s such a potentially lucrative category that the first scent of a filing — and maybe approval (big IF) — that everyone wants in on it.”

Cryptocurrencies have staged a comeback from last year’s doldrums, with Bitcoin almost doubling to break above $30,000 this week from around $16,600 at the start of 2023. Plenty of reasons have been proposed for its eye-catching surge, including prospects for interest rates coming down soon that would pave the way for riskier assets to rally. Digital-asset fans have also said that recent turmoil in the banking sector may have pushed some investors toward crypto, seeing it as independent of the traditional-finance system. Still, the largest token is down more than 50% from its near-$69,000 high reached in 2021.