- Volatility Shares introduces “one-plus-one” ETFs, simultaneously enabling 100% leveraged exposure to two assets.
- The ETFs combine cryptocurrencies like Bitcoin and Ethereum with traditional indexes such as Nasdaq and S&P 500 for diversification.
- Competing filings from Bitwise and Franklin Templeton highlight the rising demand for innovative crypto-ETF solutions.
Financial firm, Volatility Shares, recognized for its exchange-traded funds (ETFs) innovations, has launched new products that provide leveraged access to cryptocurrency and traditional financial indexes. Using a Novel “one ‘plus one” model offers these ETFs for the investment to provide the full notional leverage equivalent to two different assets.
The product lineup includes portfolios such as BTC+ETH, Nasdaq+ETH, S&P+BTC, S&P+ETH, Nasdaq+S&P, and Nasdaq+VIX. The innovative structure uses future contracts to give investors 100% access to each type of asset without calling for more funds from them. This approach allows participants to diversify their portfolios efficiently without sacrificing exposure to either component.
ETFs Designed for Optimized Portfolio Allocation
ETF specialist Eric Balchunas of Bloomberg Intelligence noted the resemblance between these one-plus-one ETFs and “Return-Stacked ETFs,”. It also uses leverage to maximize portfolio exposure. Balchunas highlighted the appeal of these products for investors seeking to optimize their allocations. This is by integrating high-growth assets like cryptocurrencies with traditional market staples.
VolatilityShares launching new line of One+One ETFs which use leverage to give you 100% exposure to two assets at once eg 100% QQQ + 100% Ether. Seems similar to the Return Stacked ETFs
— Eric Balchunas (@EricBalchunas) November 28, 2024
Jeffrey Ptak, CFA and Chief Ratings Officer at Morningstar, further explained that the ETFs achieve dual-exposure goals through futures contracts. Nasdaq+BTC ETF would simultaneously offer full exposure to the Nasdaq index and Bitcoin’s dynamic crypto market. Filings for these ETFs have already been submitted to regulatory authorities, underscoring Volatility Shares’ commitment to expanding the ETF landscape.
Increased Competition in the Crypto-ETF Space
The launch of these ETFs arrives amidst heightened competition in the crypto-ETF market. Participants like Bitwise and Franklin Templeton have submitted related filings for ETFs that blend cryptocurrency with common market access. A proposed “Bitwise 10 Crypto Index ETF” contains a diversified basket of selected cryptocurrencies. Additionally it directly competes with Volatility Shares, Franklin Templeton’s Bitcoin and Ethereum Index ETF.
Despite investors’ interest, regulatory challenges have lingered over the crypto-ETF space. Currently, the US Securities and Exchange Commission (SEC) has been cautious in approving cryptocurrency ETFs due to the increased risk controls of market manipulations and fluctuations of assets. However, institutional players such as BlackRock, Franklin Templeton, and Volatility Shares are participating, which could signal a change in regulatory perspective.
Even the recent one-plus-one ETFs could be a huge leap in the ETF market initiated by Volatility Shares with powerful tools for investors to penetrate high-growth cryptos in one silver bullet with their regular financial assets.
