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And the article precisely makes the point that everybody knows Bitcoin is volatile, hence volatility isn't a "problem" for this ETF.

by mrb 10y ago

slg 10y ago
This is based on an assumption. These things shouldn't have to be assumed. For example, check out the page for the example ETF from the article [1]. >Leveraged and inverse ETFs pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying index over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. [1] - http://www.direxioninvestments.com/products/direxion-daily-junior-gold-miners-bull-3x-etf http://www.direxioninvestments.com/products/direxion-daily-j... It makes the volatility clear. It tells you not to buy and hold. Would a Bitcoin ETF have those same type of warnings?
- frgtpsswrdlame 10y ago
  It tells you not to buy and hold, not because of the volatility but because of the leverage. Leveraged ETFs are rebalanced daily and designed to offer 2x or 3x returns only on a daily basis, this is why they say: >...should not be expected to track the underlying index over periods longer than one day. You shouldn't hold a leveraged ETF for very long because it will become unhinged from a layman's expectation of performance. AKA if I buy $SSO this morning and sell it this afternoon, I will get double the S&P's returns. If I buy $SSO this morning and sell it in June, I may get 1.5x returns or 2.5x returns or anything in between. This bitcoin ETF won't behave like that so it should be fine, it's a volatile investment, investors should do their DD.
- modeless 10y ago
  > Would a Bitcoin ETF have those same type of warnings? No need to speculate. The answer is yes, the COIN ETF has all the appropriate warnings. The risks are quite clearly spelled out in the S-1 as is standard with these sorts of things: https://www.sec.gov/Archives/edgar/data/1579346/000119312517034708/d296375ds1a.htm#toc296375_4 https://www.sec.gov/Archives/edgar/data/1579346/000119312517...

And the article precisely makes the point that everybody knows Bitcoin is volatile, hence volatility isn't a "problem" for this ETF.

by mrb 10y ago

And the article precisely makes the point that everybody knows Bitcoin is volatile, hence volatility isn't a "problem" for this ETF.

slg 10y ago

This is based on an assumption. These things shouldn't have to be assumed. For example, check out the page for the example ETF from the article [1]. >Leveraged and inverse ETFs pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying index over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. [1] - http://www.direxioninvestments.com/products/direxion-daily-junior-gold-miners-bull-3x-etf http://www.direxioninvestments.com/products/direxion-daily-j... It makes the volatility clear. It tells you not to buy and hold. Would a Bitcoin ETF have those same type of warnings?

frgtpsswrdlame 10y ago
It tells you not to buy and hold, not because of the volatility but because of the leverage. Leveraged ETFs are rebalanced daily and designed to offer 2x or 3x returns only on a daily basis, this is why they say: >...should not be expected to track the underlying index over periods longer than one day. You shouldn't hold a leveraged ETF for very long because it will become unhinged from a layman's expectation of performance. AKA if I buy $SSO this morning and sell it this afternoon, I will get double the S&P's returns. If I buy $SSO this morning and sell it in June, I may get 1.5x returns or 2.5x returns or anything in between. This bitcoin ETF won't behave like that so it should be fine, it's a volatile investment, investors should do their DD.
modeless 10y ago
> Would a Bitcoin ETF have those same type of warnings? No need to speculate. The answer is yes, the COIN ETF has all the appropriate warnings. The risks are quite clearly spelled out in the S-1 as is standard with these sorts of things: https://www.sec.gov/Archives/edgar/data/1579346/000119312517034708/d296375ds1a.htm#toc296375_4 https://www.sec.gov/Archives/edgar/data/1579346/000119312517...