The U.S. Securities and Exchange Commission (SEC) has approved the first leveraged Bitcoin futures exchange-traded fund (ETF) on Friday. Volatility Shares 2x Bitcoin Strategy ETF (BITX) is scheduled to launch on the Chicago Board Options (CBOE) BZX Exchange next Tuesday, June 27.

According to the SEC filing, BITX “seeks investment results that correspond to two times (2x) the return of the Chicago Mercantile Exchange (CME) Bitcoin Futures Daily Roll Index.”

An ETF, or exchange-traded fund, bundles securities like stocks and commodities. Investors can buy shares of an ETF to gain exposure to those securities without owning them directly. In the case of Bitcoin ETFs, there have been two main types: Bitcoin futures and Bitcoin spot.

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The BITX fund will be a leveraged ETF. Leveraged funds use debt or financial derivatives—in this case, Bitcoin futures—as leverage to amplify the returns of a benchmark index. That leverage can mean short-term gains for investors, but it can also lead to big losses.

Today’s news was mostly lauded by cryptocurrency advocates across the market, however it does leave space for some questions.

“When we look back on the Bitcoin ETF saga in 5 or 10yrs, this will be one of the most ridiculous aspects... A 2x leveraged futures product launching before a straightforward spot ETF,” Nate Geraci, co-founder of the ETF Institute wrote on Twitter. He ended his tweet with: “Wild.”

Meanwhile, others pointed out that $BITO, the U.S.’s first Bitcoin futures ETF, has underperformed BTC year-to-date, although it did jump on today’s news against its USD pair. The asset notched a 3.45% gain on the day, reaching $17.57, according to Yahoo Finance–still down more than 50% from its all-time high of $43.32 in 2021.

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Bitcoin continues its rally, touching $31,000 today, with a 3.4% gain.

Approving BITX breathes some fresh air into the digital asset industry, after the SEC sued two of the largest crypto exchanges earlier this month. The regulatory agency’s head, Gary Gensler, has proved to be a staunch detractor of cryptocurrencies.

With BlackRock applying for a Bitcoin ETF earlier this week, could this be a sign of the tides turning for the SEC’s turbulent relationship with crypto? It might be a bit early, but the news is no doubt encouraging for investors.

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