Key Information:
- Bitwise and ProShares both submitted ETF proposals related to Circle (CRCL) on June 6.
- The ProShares fund aims to deliver double the daily performance of CRCL shares.
- The Bitwise fund uses a covered call strategy to earn income from holding CRCL shares.
Two prominent ETF providers are competing to introduce funds that will track the dramatic increase in Circle’s recently public stock.
Bitwise and ProShares late Friday each submitted applications with the U.S. Securities and Exchange Commission (SEC) to establish exchange-traded funds (ETFs) linked to Circle (CRCL).
Both funds offer investors different avenues to capitalize on Circle’s recent surge, which has garnered significant attention since its IPO last week. Today, shares have seen another 9% rise, nearly quadrupling from their initial $31 offering price.
ProShares is looking to launch the ProShares Ultra CRCL ETF, designed to give investors double the daily return of CRCL stock. Leveraged ETFs like this one are often sought for short-term trading, though they bear significant risk due to compounding effects.
Bitwise, alternatively, is adopting a more conservative income-focused strategy with its proposed Bitwise CRCL Option Income Strategy ETF, which would employ a covered call approach. This involves holding CRCL shares while selling call options against them regularly, creating cash premiums that could stabilize returns if the stock’s growth decreases. This kind of fund is typically favored by investors seeking income rather than rapid growth.
Neither fund has announced a ticker symbol yet, but both are expected to become effective on August 20, pending the SEC’s timelines for approvals.
Circle, a key player in the stablecoin ecosystem, is attracting interest from both traditional finance and crypto investors. Approval of these ETFs by the SEC may represent a further integration of crypto-linked assets into conventional investment strategies.
