Volatility Shares, a financial company known for its innovative exchange-traded funds, is launching a new line of ETFs. The financial instrument, using a one-plus-one model, will give investors 100% leveraged exposure to two distinct assets simultaneously.
This product structure combines major asset classes such as cryptocurrencies, equity indices, and volatility measures. It offers portfolios such as BTC+ETH, Nasdaq+ETH, S&P+BTC, S&P+ETH, S&P+Nasdaq, and S&P+VIX.
Volatility Shares introduces diversified exposure to ETFs
According to Eric Balchunas, an ETF expert at Bloomberg Intelligence, one-plus-one ETFs are reminiscent of “Stacked Return ETFs.” They use leverage to maximize exposure without requiring additional capital from investors. Balchunas highlighted the appeal of these products for investors looking to optimize their portfolio allocation without sacrificing exposure to one asset over another.
VolatilityShares launching a new line of One+One ETFs that use leverage to give 100% exposure to two assets at the same time, for example 100% QQQ + 100% Ether. It looks similar to the Stacked Return ETFs, Balchunas commented.
Jeffrey Ptak, CFA and Director of Valuations at Morningstar, provided additional insight. He explained that ETFs aim to provide 100% notional exposure to each of the two underlying assets using futures contracts.
For example, the Nasdaq+BTC ETF would simultaneously provide full exposure to the technology-focused Nasdaq index and the volatile Bitcoin crypto market. Ptak also confirmed that registrations for this line of ETFs have been submitted to regulatory bodies.
Implications for Investors as Crypto-ETF Competition Heats Up
For investors, one-plus-one ETFs represent a significant growth in the exchange-traded fund space. Combining traditional financial instruments like the S&P 500 or Nasdaq with high-growth assets like Bitcoin and Ethereum can enable unique diversification strategies.
However, the leverage inherent in these products introduces additional risks, especially for volatile assets like cryptocurrencies. This can amplify both gains and losses.
Products like these could be game-changers for portfolio diversification, but their complexity and leverage make them suitable for informed investors who understand the risks, an industry expert said after the announcement.
However, Volatility Shares’ innovative approach comes amid growing activity in the crypto ETF space. Additionally, Bitwise recently filed an application with the U.S. Securities and Exchange Commission (SEC) for a “Bitwise 10 Crypto Index ETF.”
The index seeks to track the performance of a diversified basket of major cryptocurrencies. The move reflects the growing demand for accessible crypto investments that go beyond single-asset offerings like Bitcoin or Ethereum.
Franklin Templeton has also submitted a proposal to the SEC for a Bitcoin and Ethereum Index ETF. This fund would compete directly with Volatility Shares’ dual-asset products, targeting the same market of investors looking to combine exposure to traditional stocks with cryptocurrencies.
However, despite the surge in crypto ETF filings, regulatory challenges remain a major hurdle. The SEC has historically been cautious about approving crypto-related ETFs due to concerns about market manipulation and volatility. However, with growing interest from institutional players like BlackRock, Franklin Templeton, and now Volatility Shares, the momentum toward approval may be shifting.
The article Volatility Shares Unites Crypto and Indices in New ETFs was first seen on BeInCrypto Brasil.
