TLDR
- LeverageShares has filed to launch a 2x Long Kraken ETF that would track the daily performance of the private cryptocurrency exchange.
- The proposed Kraken ETF aims to offer investors 200% exposure to Kraken’s price movements despite the exchange being privately held.
- Kraken has filed confidentially for a U.S. IPO, which could align with the launch of the proposed leveraged ETF in the future.
- LeverageShares is expanding its portfolio of leveraged products and has launched over 180 ETFs, including single-stock and sector-based options.
- The Kraken ETF would likely mirror derivative contracts or indices linked to Kraken’s market activity until the exchange goes public.
LeverageShares has filed to launch a 2x long ETF tracking the daily performance of Kraken, a private cryptocurrency exchange. This would be the first leveraged product tied directly to a private crypto exchange. The ETF aims to amplify Kraken’s daily price movements, offering investors 200% of the exchange’s performance.
Leveraged Product Tied to Private Crypto Exchange
According to Bloomberg senior ETF analyst Eric Balchunas, this would be the first attempt to launch such a product. The Kraken ETF would amplify daily price movements by 2x, despite Kraken not being a publicly traded company. Balchunas shared his insights on X, expressing surprise at the development, “LeverageShares just filed for a 2x Long Kraken ETF… which I believe isn’t even IPO-ing until next year. What a country.”
LeverageShares, which is known for its single-stock and leveraged exchange-traded products, has been expanding its portfolio in recent months. The company already manages ETFs like the 2x Long Adobe ETF, which provides double exposure to Adobe’s daily price movements. Investors holding such leveraged ETFs can see returns that differ significantly from the expected 2x performance if held beyond a single trading day.
Kraken’s Confidential IPO Filing
Kraken recently filed confidentially for a U.S. IPO. The exchange has not disclosed details about the number of shares or the price range for the offering. The IPO will occur after the U.S. Securities and Exchange Commission (SEC) completes its review of the filing.
Kraken has also secured substantial funding. Last week, the exchange raised $800 million in a funding round that included a $200 million investment from Citadel Securities. Kraken’s valuation now stands at $20 billion, underscoring its position as one of the top cryptocurrency exchanges globally.
While Kraken is still a private company, its planned IPO could eventually allow for a more direct link between Kraken’s market activity and a financial instrument. Until then, the proposed Kraken ETF would likely mirror the performance of derivative contracts or indices tied to the exchange’s market movements. This approach would resemble leveraged cryptocurrency ETFs that track baskets of crypto tokens or related assets.
LeverageShares’ Expansion into Leveraged Products
LeverageShares, founded in 2017, has become one of Europe’s largest issuers of single-stock ETPs. The firm has launched over 180 products, offering leveraged and unleveraged exposure to various stocks, commodities, and ETFs. In September, LeverageShares launched 19 new ETPs on the London Stock Exchange, including products tied to Robinhood, Hims & Hers, and UnitedHealth.
The firm’s expertise in leveraged exposure to major companies has made it a key player in the ETP market. Its existing products, such as the 3x long and inverse ETPs tied to companies like UnitedHealth, Intel, and Broadcom, have garnered investor attention. The Kraken ETF would add to this growing list of leveraged exchange-traded products from LeverageShares.
LeverageShares’ proposed Kraken ETF would likely become a highly anticipated product if the exchange’s IPO proceeds. With Kraken’s valuation soaring and its market position strengthened by recent funding, the ETF could attract significant interest from both retail and institutional investors.
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