Part 8/13:
The upcoming launch of a leveraged Bitcoin futures ETF, scheduled for June 27, marks a significant development. The Volatility Shares 2x Bitcoin Strategy ETF (ticker: BITX) will enable investors to leverage their exposure, potentially amplifying gains—and losses.
However, the speaker warns of the inherent dangers. Since the inception of Bitcoin futures ETFs, performance has lagged behind the spot Bitcoin price, with some ETFs underperforming drastically. Contango—the state where futures prices exceed the spot—means that holding leveraged futures for more than a few weeks can lead to decay and losses. For example, continuous rollover costs and premium payments could erode returns, making short-term positions (6 weeks or less) the prudent approach.