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Valkyrie Goes for a Leveraged Bitcoin Futures ETF Dubbed ‘BUFD’ in Regulatory Filing

Sarah Wynn
Last updated: | 1 min read
Source: Pixabay

Asset management firm Valkyrie filed an application to a US regulator to launch a leveraged bitcoin futures ETF with an interesting ticker symbol.

The Valkyrie Bitcoin Futures Leveraged Strategy ETF, with the ticker symbol BTFD, would not invest directly in bitcoin, and instead seeks to benefit from increases in the price of bitcoin futures contracts, according to a document on Monday filed with the Securities and Exchange Commission. 

The fund is designed to be used only by sophisticated investors, Valkyrie said.  

The name, BTFD, is also known in the crypto community as “buy the f***ing dip.” 

Valkyrie did not immediately respond to a request for comment.

The firm issued a warning to those interested in the fund. 

“Bitcoin and bitcoin futures contracts are a relatively new asset class and are subject to unique and substantial risks, including the risk that the value of the Fund’s investments could decline rapidly, including to zero,” the firm said. “Bitcoin and bitcoin futures contracts have historically been more volatile than traditional asset classes. You should be prepared to lose your entire investment.”

The SEC first approved a bitcoin futures ETF when it allowed the trading of the ProShares Bitcoin Strategy ETF in October 2021, and a handful of others have since launched. 

What about spot bitcoin ETFs? 

That is a bit more complicated —the SEC has not approved a spot bitcoin ETF, where it would track the price of bitcoin, not on futures. 

The approval of a bitcoin futures ETF and not a spot bitcoin ETF has been specifically a point of contention amid a lawsuit brought against the SEC by crypto asset management company Grayscale.

Grayscale has been trying to convert its flagship Grayscale Bitcoin trust fund into a spot bitcoin ETF for years. 

In its brief, Grayscale argued that the spot price of bitcoin in both spot and futures ETFs is subject to the same risks, and so it does not make sense to approve one product and not the other.