CNBC contributor Brian Kelly is partnering with exchange traded funds issuer REX Shares on cryptocurrency ETFs.
Last year, REX Shares filed plans for the REX Bitcoin Strategy ETF and REX Short Bitcoin Strategy ETF. Those funds, assuming they come to market, will be actively managed.
In addition to being a CNBC contributor, “Kelly is also the founder of BKCM, an investment firm that specializes in macroeconomics and digital assets. Among BKCM’s offerings is the Digital Asset Fund, a hedge fund that provides investors with exposure to cryptoassets and blockchain companies,” reports Strategic Coin.
The Bitcoin Strategy ETF will hold a portfolio of financial instruments that provide long exposure to movements in the value of bitcoin, along with a portfolio of fixed income instruments. The fund will obtain indirect exposure to Bitcoin price movements through the use of financial instruments that provide access to the price movements, such as futures contracts linked to the price of Bitcoin or an index.
Similarly, the Short Bitcoin Strategy will provide short exposure to the movements in the value of Bitcoins through financial instruments, including short positions in and short exposure to futures contracts linked to the price of bitcoin or an index.
Thus far, no exchange traded products related to digital currencies have been approved by U.S. regulators, but industry observers believe that trend is set to change following the debut of bitcoin futures on the Cboe and CME in December.
Derivatives help increase liquidity and improve markets for an asset category by allowing investors to bet on ups and downs of an asset, evening allowing individuals to adopt market-neutral strategies. They are also a key component in the creation of many futures-backed ETFs utilized by a range of investors.
REX Shares launched its first exchange traded products, REX VolMAXX Long VIX Weekly Futures Strategy ETF (Cboe: VMAX) and the REX VolMAXX Inverse VIX Weekly Futures Strategy ETF (Cboe: VMIN), in May 2016.
VMAX seeks to provide investors with exposure to the implied volatility of the broad-based, large-cap U.S. equity market. VMIN seeks to provide investors with inverse exposure to the implied volatility of the broad-based, large-cap U.S. equity market.
For more information on the cryptocurrency market, visit our Bitcoin category.