- Defiance Investments has filed a prospectus to launch 49 new exchange-traded funds (ETFs) offering three times leveraged long and short exposure in the U.S.
- The proposed ETFs include products focused on companies like Coinbase, Robinhood, MicroStrategy, BitMine Immersion, and Circle.
- The funds aim to track price movements of Bitcoin, Ethereum, Solana, and select technology firms.
- The move follows the current offering of two times leveraged ETFs by Defiance and other firms, which are typically marketed for short-term trading.
- Industry experts caution that leveraged products can carry high risk and may not suit all investors.
Defiance Investments submitted a prospectus to the U.S. Securities and Exchange Commission (SEC) proposing 49 new exchange-traded funds. These funds would offer investors three times leveraged and inverse leveraged exposure to technology and cryptocurrency-focused companies, in addition to tracking the price of digital assets like Bitcoin, Ethereum, and Solana.
The application, filed on a recent Friday, includes leveraged products for well-known stocks such as Coinbase, MicroStrategy, Robinhood, BitMine Immersion, and Circle, as well as ETF offerings that mirror Grayscale’s Bitcoin and Ethereum mini-trusts and Volatility Shares’ Solana ETF. Defiance already provides similar products with two times leverage, designed for traders seeking to speculate on single-day price movements of fast-moving stocks. Official filings stress that the new three times leveraged funds are intended for investors who can tolerate higher risk.
Leveraged ETFs magnify daily returns by using financial tools like derivatives. While two times leveraged funds are more common, three times leveraged funds can lead to significant gains or losses if underlying assets move sharply. According to the Defiance prospectus, these products are not suitable for all investors and carry added risks.
“Things are getting wild,” stated James Seyffart, a Bloomberg ETF Analyst, in a recent post about the proposals. “If they launch, these would be extremely risky funds designed for the most aggressive short-term traders,” wrote Sumit Roy, Senior ETF Analyst at ETF.com.
More than 90 ETF applications tracking cryptocurrencies or combinations of digital tokens are under review by regulators. The surge in ETF interest comes after the strong performance of spot Bitcoin and Ethereum ETFs, with Bitcoin ETFs now managing about $150 billion in assets, according to data from CoinGlass. Recent filings by other companies, such as LeverageShares and Themes Trust, further reflect growing interest in more sophisticated trading products for the crypto market.
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