Though Bitcoin (BTC) spot ETFs launched by BlackRock and others have been all the rage in crypto, there’s a slightly older Bitcoin fund that’s also seen exponential gains in the past few months.

The 2X Bitcoin Strategy ETF (BITX) has quadrupled its Bitcoin exposure since January, now reigning as one of the largest Bitcoin futures ETFs in the United States.

Institutions Increase Bitcoin Leverage

According to Volatility Shares’ website, BITX held net assets worth $1.58 billion as of Tuesday. By comparison, the ProShares Bitcoin Strategy ETF (BITO) – the first Bitcoin futures ETF to ever launch in the U.S. – held $2.82 billion as of Tuesday, making BITX one of its only noteworthy rivals in the futures ETF market.

In a post to X on Wednesday, Bloomberg ETF analyst Eric Balchunas said that BITX “is way bigger than most of us would have predicted.”

“Institutions are cranking up their leveraged Bitcoin exposure,” added Nic Puckrin, CEO and co-founder of CoinBureau. “Just goes to show, the institutions are just as degen as the rest of us.”

Traditional Bitcoin futures ETFs – such as BITO – seek to provide investors with returns that closely track those of Bitcoin by investing in Bitcoin futures contracts.

BITX, however, is leveraged: it aims to produce daily returns corresponding to 2X the daily returns of CME Bitcoin futures. That makes it an extra risky and volatile crypto investment option for people to buy within their brokerage accounts – but also an extra juicy choice for Bitcoin bulls.

Since first launching in June 2023, BITX has performed as intended: first-day buyers are up 235% on their investments, while they’d be up 117% had they bought Bitcoin itself. Across certain timeframes, BITX has more than doubled Bitcoin’s performance.

Risks Of A Leveraged ETF

According to K33 Research, inflows to the fund since March surpassed most of the new Bitcoin spot ETFs, including the ARK 21Shares Bitcoin ETF (ARKB) and the Bitwise Bitcoin ETF (BITB).

“The flows are still considerably less than those that are going into the spot products, but its rate of growth is higher,” Puckrin noted, referring to the largest newborn Bitcoin spot ETFs run by BlackRock (IBIT) and Fidelity (FBTC).

While its returns seem promising, BITX notes in its prospectus that returns can fluctuate in the long term and not correspond to 2X that of Bitcoin.

“For periods longer than a single day, the Fund will lose money if the Index’s performance is flat, and it is possible that the Fund will lose money even if the level of the Index increases,” it states.