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24th June 2023 > > Madness.


The SEC has approved a 2x leveraged futures based BTC ETF, which is frankly shocking, and is ample proof that the SEC does not understand the concept of “investor protection”.

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And so, the implosion of Putin’s murderous and corrupt regime begins. Prigozhin is doing the world a favour, though I doubt that is his primary motivation. The oligarchs cannot be happy about the current restrictions on their use of super-yachts and fabulous penthouse apartments, all gained through the process of stripping ownership of assets away from the state and the common man. If Putin is seen as vulnerable, his life expectancy is measured in hours at best. The price for bringing Russia back into the fold? Crimea will be returned to Ukraine.

Curious Cryptos’ Commentary – What nonsense

Curious Cryptos’ Commentary – And some more nonsense

I have never fully understood how it’s possible that the SEC has approved several futures based BTC ETFs whilst denying approval for spot BTC ETFs due to the possibility of market manipulation of the spot price. There is no asset class in the world that does not carry the theoretical risk of market manipulation. For the last decade now, FX markets and government bond markets have been subject to the single largest example of market manipulation of all time caused by the imposition of quantitative easing by central banks. Not a peep out of the SEC, nor even the mildest threat of enforcement action. Anyone in the private sector indulging in such rampant fixing of market prices would never get out of jail again. What price investor protection, Gary Gensler?

When looking at futures, prices are driven by several factors (interest rates, time to maturity, liquidity, amongst others) but the single most important one is the spot price. Any manipulation of the spot price would feed into the futures price, and hence the price of a futures-based ETF.

But if this obvious and glaring contradiction lying at the very heart of the SEC’s analysis of BTC markets confuses and concerns you, I am about to shock you with probably the most nonsense decision ever made by any regulator.

Leveraged trading of financial assets by retail investors is, in my humble opinion, a crazy route to go down. Though there are many regulated platforms such as IG Trading, approximately 80% of investors lose money. I suspect that the 20% who make money are professionals.

When it comes to cryptos, it is a very brave but exceedingly foolish investor who uses leverage of more than 1x. We know this from the frequent occurrence of both short and long squeezes presaged by an imbalance shown in the Binance perpetual futures funding rate when it deviates from 0.01%.

But leveraged trading of BTC has been given the SEC’s approval with the launch of Volatility Shares 2x Bitcoin Strategy ETF (BITX) next Tuesday on the Chicago Board Options Exchange.

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

I have lost the ability to express my horror at this decision, so over to Nate Geraci, co-founder of the ETF Institute, who tweeted:

“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.


Several commentators are positing that this approval shows a softening in the SEC’s stance towards cryptos.

If only that were true.

I think it merely highlights once again the confusion and inconsistency inherent in the thought processes of senior individuals at the SEC. It is not possible to believe that approval of this product protects investors’ interest.

Madness, sheer and utter madness.

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