Many institutional investors are wise to use the futures contracts to lower the Bitcoin price to buy in lower by setting the stop-loss triggers at support levels to push down the price further and further to make it look like a crash. This scares novice investors to support the bears and sell to avoid a total loss. By taking this strategy, the Wall Street investors are strategically pushing down the price for in order to re-enter at much lower levels and potentially set Bitcoin up for another rocket rise to unprecedented highs. Then, assumingly, collect profits and repeat the cycle, increasing profits each time Bitcoin rises and falls.


In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network. The rate of generating hashes, which validate any transaction, has been increased by the use of specialized machines such as FPGAs and ASICs running complex hashing algorithms like SHA-256 and Scrypt.[38] This arms race for cheaper-yet-efficient machines has been on since the day the first cryptocurrency, bitcoin, was introduced in 2009.[38] With more people venturing into the world of virtual currency, generating hashes for this validation has become far more complex over the years, with miners having to invest large sums of money on employing multiple high performance ASICs. Thus the value of the currency obtained for finding a hash often does not justify the amount of money spent on setting up the machines, the cooling facilities to overcome the enormous amount of heat they produce, and the electricity required to run them.[38][39]
For purposes of this SAI, the word “invest” refers to a Fund directly and indirectly investing in securities or other instruments. Similarly, when used in this SAI, the word “investment” refers to a Fund’s direct and indirect investments in securities and other instruments. For example, the Funds typically invest indirectly in securities or instruments by using financial instruments with economic exposure similar to those securities or instruments.
•   Investments by a Fund in options, futures, forward contracts, swap agreements and other derivative financial instruments are subject to numerous special and complex tax rules. These rules could affect the amount, timing or character of the distributions to shareholders by a Fund. In addition, because the application of these rules may be uncertain under current law, an adverse determination or future Internal Revenue Service guidance with respect to these rules may affect whether a Fund has made sufficient distributions, and otherwise satisfied the relevant requirements, to maintain its qualification as a regulated investment company and avoid fund-level tax.
Poloniex is popular with users seeking to convert cryptocurrencies, margin trade and lend. Services are accessible across the globe. Fees is dependent on the maker-the one whose name is already listed and taker-the one who makes an order. Makers are so named because they maintain the liquidity in the market. Every 24 hours the platform calculates the fees based on the volume traded between market and the taker for last 30 days and the fees is updated dynamically.
Market conditions should be considered favorable to a Fund when such conditions make it more likely that the value of an investment in that Fund will increase. Market conditions should be considered adverse to a Fund when such conditions make it more likely that the value of an investment in that Fund will decrease. For example, market conditions that cause the level of the S&P 500® to rise are considered “favorable” to the Ultra S&P500® and are considered “adverse” to the Short S&P500®.

If the price drops to $500, you earn 11.73 BTC on the position and have 20.06 BTC left, which at $500 per BTC is worth $10,000! This is a simple example just to show you, even if you're a small bitcoin holder, bitcoin futures are a valuable risk management tool. You could have performed this "hedge" at 50x leverage by putting down just 8.33/50= 0.17 BTC worth of margin!
The tax rules are uncertain with respect to the treatment of income or gains arising in respect of commodity-linked exchange-traded notes (“ETNs”) and certain commodity-linked structured notes; also, the timing and character of income or gains arising from ETNs can be uncertain. An adverse determination or future guidance by the IRS (which determination or guidance could be retroactive) may affect a Fund’s ability to qualify for treatment as a regulated investment company and to avoid a Fund-level tax.
The equity markets are volatile, and the value of securities, swaps, futures, and other instruments correlated with the equity markets may fluctuate dramatically from day-to-day. Equity markets are subject to corporate, political, regulatory, market and economic developments, as well as developments that impact specific economic sectors, industries or segments of the market. Further, stocks in the Index may underperform other equity investments. Volatility in the markets and/or market developments may cause the value of an investment in the Fund to decrease.
The BofA Merrill Lynch Marks are trademarks of Merrill Lynch, Pierce, Fenner & Smith Incorporated or its affiliates and have been licensed for use by Trust. S&P, MSCI and Russell, respectively, are trademarks of Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. and Standard & Poor’s Financial Services LLC, MSCI, Inc. and Frank Russell Company and have been licensed for use by BofA Merrill Lynch.

The rights of indemnification under the Declaration of Trust may be insured against by policies maintained by the Trust, and shall be severable, shall not affect any other rights to which any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be a Covered Person, and shall inure to the benefit of the heirs, executors and administrators of such a person. Nothing contained in the Declaration of Trust shall affect any rights to indemnification to which Trust personnel other than Covered Persons may be entitled by contract or otherwise under law.

•   Subsidiary Investment Risk — Changes in the laws of the United States and/or the Cayman Islands, under which the Fund and the Subsidiary are organized, respectively, could result in the inability of the Fund to operate as intended and could negatively affect the Fund and its shareholders. The Subsidiary is not registered under the 1940 Act and is not subject to all the investor protections of the 1940 Act. Thus, the Fund, as an investor in the Subsidiary, will not have all the protections offered to investors in registered investment companies.
Market conditions should be considered favorable to a Fund when such conditions make it more likely that the value of an investment in that Fund will increase. Market conditions should be considered adverse to a Fund when such conditions make it more likely that the value of an investment in that Fund will decrease. For example, market conditions that cause the level of the S&P 500® to rise are considered “favorable” to the Ultra S&P500® and are considered “adverse” to the Short S&P500®.
Cryptocurrencies are far more volatile than stocks and bonds, and the industry evolves rapidly. An altcoin that is popular today may not exist a month or a year from now. In other words, traders should consider the possibility of losing everything when they start trading. For this reason, you should put only a very small portion of your portfolio in this sector.
Interest Rate Swaps. Interest rate swaps, in their most basic form, involve the exchange by a Fund with another party of their respective commitments to pay or receive interest. For example, a Fund might exchange its right to receive certain floating rate payments in exchange for another party’s right to receive fixed rate payments. Interest rate swaps can take a variety of other forms, such as agreements to pay the net differences between two different interest indexes or rates, even if the parties do not own the underlying instruments. Despite their differences in form, the function of interest rate swaps is generally the same: to increase or decrease a Fund’s exposure to long- or short-term interest rates. For example, a Fund may enter into a swap transaction to preserve a return or spread on a particular investment or a portion of its portfolio or to protect against any increase in the price of securities the Fund anticipates purchasing at a later date.

As a shareholder on a Fund record date, you will earn a share of the investment income and net realized capital gains, if any, derived from a Fund’s direct security holdings and derivative instruments. You will receive such earnings as either an income dividend or a capital gains distribution. Each Fund intends to declare and distribute to its shareholders at least annually its net investment income, if any, as well as net realized capital gains, if any. Subject to Board approval, some or all of any net realized capital gains distribution may be declared payable in either additional shares of the respective Fund or in cash.
The BofA Merrill Lynch Marks are trademarks of Merrill Lynch, Pierce, Fenner & Smith Incorporated or its affiliates and have been licensed for use by Trust. S&P, MSCI and Russell, respectively, are trademarks of Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. and Standard & Poor’s Financial Services LLC, MSCI, Inc. and Frank Russell Company and have been licensed for use by BofA Merrill Lynch.
On September 17, 2015, the CFTC provided clarity regarding the regulatory treatment of bitcoin in the Coinflip civil enforcement case. There the CFTC determined that bitcoin and other virtual currencies are regulated as commodities under the CEA. Based on this determination, the CFTC applied CEA provisions and CFTC regulations that apply to a bitcoin derivatives trading platform. Also of significance, the CFTC took the position that bitcoin is not encompassed by the definition of currency under the CEA and CFTC regulations. The CFTC defined bitcoin and other “virtual currencies” as “a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value, but does not have legal tender status in any jurisdiction. Bitcoin and other virtual currencies are distinct from ‘real’ currencies, which are the coin and paper money of the United States or another country that are designated as legal tender, circulate, and are customarily used and accepted as a medium of exchange in the country of issuance.” On July 6, 2017, the CFTC granted LedgerX, LLC an order of registration as a Swap Execution Facility for digital assets and on July 24, 2017, the CFTC approved Ledger X, LLC as the first derivatives clearing organization for digital currency. On September 21, 2017, the CFTC filed a civil enforcement action in federal court against a New York corporation and its principal, charging them with fraud, misappropriation, and issuing false account statements in connection with a Ponzi scheme involving investments in bitcoin, which the CFTC asserted is a commodity subject to its jurisdiction.

Consistent with a client’s investment objective, the Advisor may enter into guarantee close agreements with certain brokers. In all such cases, the agreement calls for the execution price at least to match the closing price of the security. In some cases, depending upon the circumstances, the broker may obtain a price that is better than the closing price and which under the agreement provides additional benefits to clients. The Advisor will generally distribute such benefits pro rata to applicable client trades.

A large investor tends to have portfolios that are diversified enough that they can stomach deviations from expected price movements even with leverage. But smaller investors have smaller accounts, and that is where leverage can be fatal. This is because amplified losses can grow larger than the account balance and cause the need for a margin call when facing the prospect of going into severe debt.
Market makers are challenged in fast markets—when either buyers or sellers are dominating and prices are moving rapidly. When this happens market makers are obligated to continue quoting bid and ask prices that maintain some semblance of an orderly market. If they start accumulating uncomfortably large net long or short inventories they may start hedging their positions to protect themselves. For example, if they are short Bitcoin futures they can buy Bitcoin futures with different expirations or directly buy Bitcoins to hedge their positions. The hedged portion of the market maker’s portfolio is not sensitive to Bitcoin price movements—their profit/losses on the short side are offset by their long positions.
Each Fund intends to invest in bitcoin futures contracts. The Funds will not invest directly in bitcoin and are not benchmarked to the current price of bitcoin. The value of the bitcoin futures contracts is generally based on the expected value of bitcoin at a future point in time, specifically, the expiration date of the bitcoin futures contracts. Other factors, such as cost of mining, storing and securing bitcoin may affect the value of bitcoin futures. A change in the price of bitcoin today (sometimes referred to as the “spot” price) will not necessarily result in a corresponding movement in the price of the bitcoin futures contracts since the price of the bitcoin futures contracts is based on expectations of the price of bitcoin at a future point in time. Additionally, there is no one centralized source for pricing bitcoin and pricing from one bitcoin exchange to the next can vary widely. Additionally, each Fund has the ability to invest in, or take a short position in, bitcoin futures contracts offered by CFE or CME, each of which uses a different exchange, or exchanges, to determine the value of bitcoin, which may lead to material differences in the value of the bitcoin futures contracts offered by CFE and CME. As a result, each Fund should be expected to perform very differently from the performance of the spot price of bitcoin (or the inverse of such performance) over all periods of time.
The Bitcoin Network and bitcoin, as an asset, currently hold a “first-to-market” advantage, often referred to as a “network effect,” over other digital assets. This first-to-market advantage has resulted in the Bitcoin Network evolving into the most well developed network of any digital asset. The Bitcoin Network enjoys the largest user base of any digital asset and, more importantly, the largest combined mining power in use to secure the Bitcoin Blockchain. Having a large mining network enhances user confidence regarding the security of the Bitcoin Blockchain and long-term stability of the Bitcoin Network. Despite the marked network effect advantage of the Bitcoin Network over other digital assets, it is possible that real or perceived shortcomings in the Bitcoin Network, technological, regulatory or other developments could result in a decline in popularity and acceptance of bitcoin and the Bitcoin Network.

The Board has appointed a chief compliance officer (“CCO”) for the Trust (who is also the Chief Compliance Officer for the Advisor). The CCO reports directly to the Board and participates in the Board’s meetings. The Independent Trustees meet at least annually in executive session with the CCO, and the Funds’ CCO prepares and presents an annual written compliance report to the Board. The CCO also provides updates to the Board on the operation of the Trust’s compliance policies and procedures and on how these procedures are designed to mitigate risk. Finally, the CCO and/or other officers or employees of the Advisor report to the Board in the event that any material risk issues arise.
A futures curve shows the forward expectation of an asset’s price. Future rates of an asset can be calculated by extrapolating price from the risk-free theoretical spot rate of the asset. For example, one might calculate the possible future rate of an asset for the short (<1 month), medium (1-3 months) and long term (>3 months). In other words, future curves represent the demand for a specific asset and therefore the expected price evolution for the asset projected into the future. The curve is constructed from a discrete set of data points for various maturities. Initially, futures curves were used for hedging purposes, but with the evolution of the investment management industry, futures curves have become basic investment instruments not only for traditional commodities but also for new emerging asset classes.
To illustrate the point, recall that futures markets are just counterparty contracts. Let's say I want to SHORT the market and profit off a decline in BTC/USD. If I put an order to sell Weekly futures contract at $400, and someone buys that offer, then we have created a futures contract. If it goes down, I profit and he loses, if it goes up, he profits and I lose. However, what if price goes down really fast, and my counterparty only had a little margin backing his position? Well, he gets margin-called when it goes down enough, and the system takes his contract and forces it to be sold to a different counterparty that wants to take the LONG side of my contract.

Under certain circumstances, a Fund may recognize gain from a constructive sale of an “appreciated financial position” it holds if it enters into a short sale, forward contract or other transaction that substantially reduces the risk of loss with respect to the appreciated position. In that event, the Fund would be treated as if it had sold and immediately repurchased the property and would be taxed on any gain (but would not recognize any loss) from the constructive sale. The character of gain from a constructive sale would depend upon each Fund’s holding period in the property. Appropriate adjustments would be made in the amount of any gain or loss subsequently realized on the position to reflect the gain recognized on the constructive sale. Loss from a constructive sale would be recognized when the property was subsequently disposed of, and its character would depend on the Fund’s holding period and the application of various loss deferral provisions of the Code. Constructive sale treatment does not generally apply to a transaction if such transaction is closed on or before the end of the 30th day after the close of the Fund’s taxable year and the Fund holds the appreciated financial position throughout the 60-day period beginning with the day such transaction closed. The term “appreciated financial position” excludes any position that is “marked-to-market.”
The CFE has determined that if the Bitcoin Network is forked and a new blockchain is created, the form of bitcoin on which CFE bitcoin futures contracts and their final settlement values will be based is the form of bitcoin in U.S. dollars traded on the Gemini Exchange. The Gemini Exchange has indicated that it will support the network that has the greatest cumulative computational difficulty for the forty-eight hour period following a given fork. If the Gemini Exchange is unable to make a conclusive determination about which network has the greatest cumulative computational difficulty after forty-eight hours, or Gemini determines in good faith that this is not a reasonable criterion upon which to make a determination, the Gemini Exchange will support the network which it deems in good faith is most likely to be supported by a greater number of users and miners. The Gemini Exchange has indicated it will consult with CFE in the event of a fork. If the Gemini Exchange were to offer trading in multiple forms of bitcoin in U.S. dollars, the CFE would designate the form of bitcoin traded on the Gemini Exchange that would serve as the basis for CFE bitcoin futures contracts and their final settlement values.
Pursuant to an investment advisory and management agreement between ProShare Advisors and the Trust on behalf of each Unitary Fee Fund, each Unitary Fee Fund pays ProShare Advisors a fee at an annualized rate based on its average daily net assets as follows: 0.27% for S&P 500 Ex-Energy ETF; 0.27% for S&P 500 Ex-Financials ETF; 0.27% for S&P 500 Ex-Health Care ETF; 0.27% for S&P 500 Ex-Technology ETF; 0.35% for Equities for Rising Rates ETF; 0.30% for Investment Grade—Interest Rate Hedged; 0.35% for S&P 500 Dividend Aristocrats ETF; 0.40% for S&P MidCap 400 Dividend Aristocrats ETF; 0.40% for the Russell 2000 Dividend Growers ETF; 0.45% for Large Cap Core Plus; 0.45% for DJ Brookfield Global Infrastructure ETF; 0.50% for MSCI EAFE Dividend Growers ETF; 0.50% for High Yield—Interest Rate Hedged; 0.55% for MSCI Europe Dividend Growers ETF; 0.60% for MSCI Emerging Markets Dividend Growers ETF; 0.65% for Crude Oil Strategy ETF; 0.65% for Decline of the Retail Store ETF; 0.65% for Long Online/Short Stores ETF; 0.75% for Managed Futures Strategy ETF; 0.    % for the Bitcoin Futures Strategy ETF; 0.    % for the Short Bitcoin Futures Strategy ETF; 0. % for the Blockchain/Bitcoin Strategy ETF; and 0.    % for the Bitcoin Futures/Equity Strategy ETF.
  3. Make loans to other persons, except that the acquisition of bonds, debentures or other corporate debt securities and investment in government obligations, commercial paper, pass-through instruments, certificates of deposit, bankers’ acceptances and repurchase agreements and purchase and sale contracts and any similar instruments shall not be deemed to be the making of a loan, and except, further, that the Fund may lend its portfolio securities, provided that the lending of portfolio securities may be made only in accordance with applicable law and the guidelines set forth in the Prospectus and this SAI, as they may be amended from time to time.
Bitcoin has been on a tear this year, surging at least 1,000 percent in 2017. As the cryptocurrency gained even more attention from investors recently, the Commodity Futures Trading Commission announced on Friday that it would allow the CME and Cboe to launch bitcoin futures. The Cboe plans to launch on Dec. 10 and the CME intends to launch on Dec. 18.
The information herein represents the opinion of the author(s), but not necessarily those of VanEck, and these opinions may change at any time and from time to time. Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Historical performance is not indicative of future results. Current data may differ from data quoted. Any graphs shown herein are for illustrative purposes only. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.

The data contained in this website isn't real-time or necessarily accurate, meaning prices are indicative and not appropriate for trading purposes. Your capital is at risk. This website is intended as a source of information only, not financial advice. Under no circumstances should you trade commodities, select a broker or perform any other task connected with commodity trading without taking professional advice first. Commodities can fall in value as well as rise in value: substantial losses can be made commodity commodity trading or trading with CFD services.


Index options are subject to substantial risks, including the risk of imperfect correlation between the option price and the value of the underlying assets composing the index selected, the possibility of an illiquid market for the option or the inability of counterparties to perform. Because the value of an index option depends upon movements in the level of the index rather than the

DTC has advised the Trust as follows: it is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the 1934 Act. DTC was created to hold securities of its participants (“DTC Participants”) and to facilitate the clearance and settlement of securities transactions among the DTC Participants in such securities through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. More specifically, DTC is owned by a number of its DTC Participants and by the NYSE and the Financial Industry Regulatory Authority, Inc. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (“Indirect Participants”). DTC agrees with and represents to DTC Participants that it will administer its book-entry system in accordance with its rules and by-laws and requirements of law. Beneficial ownership of Shares is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in Shares (owners of such beneficial interests are referred to herein as “Beneficial owners”) is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and Beneficial owners that are not DTC Participants). Beneficial owners will receive from or through the DTC Participant a written confirmation relating to their purchase of Shares. The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability of certain investors to acquire beneficial interests in Shares.
Maintenance Margin - this is the % of the position value you have to have in your account at the very minimum to avoid being Margin Called.  In some exchanges, margin call will mean you get notified and must deposit more margin to avoid liquidation (like CryptoFacilities). On other exchanges you will at this point be liquidated out of your position. So if maintenance margin is 5%, then the 0.05 BTC of your initial margin will need to be kept for the position to be alive.
Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Historical performance is not indicative of future results. Current data may differ from data quoted. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.

The Funds may invest in a combination of forward currency contracts and U.S. dollar-denominated market instruments in an attempt to obtain an investment result that is substantially the same as a direct investment in a foreign currency-denominated instrument. This investment technique creates a “synthetic” position in the particular foreign currency instrument whose performance the manager is trying to duplicate. For example, investing in a combination of U.S. dollar-denominated instruments with “long” forward currency exchange contracts creates a position economically equivalent to investing in a money market instrument denominated in the foreign currency itself. Such combined positions are sometimes necessary when the money market in a particular foreign currency is small or relatively illiquid.


You may wonder: where do these contracts come from? We know on the spot market that bitcoins are being bought and sold for fiat, but how the heck are bitcoins being used to trade bitcoin futures contracts? Let's walk through a really simple example showing how an exchange functions when there's just a simple two traders who want to go long and short. 
In addition, the Advisor, its affiliates and principals may trade for their own accounts. Consequently, non-customer and proprietary trades may be executed and cleared through any prime broker or other broker utilized by clients. It is possible that officers or employees of the Advisor may buy or sell securities or other instruments that the Advisor has recommended to, or purchased for, its clients and may engage in transactions for their own accounts in a manner that is inconsistent with the Advisor’s recommendations to a client. Personal securities transactions by employees may raise potential conflicts of interest when such persons trade in a security that is owned by, or considered for purchase or sale for, a client. The Advisor has adopted policies and procedures designed to detect and prevent such conflicts of interest and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty to its clients and in accordance with applicable law.
Cryptocurrencies are far more volatile than stocks and bonds, and the industry evolves rapidly. An altcoin that is popular today may not exist a month or a year from now. In other words, traders should consider the possibility of losing everything when they start trading. For this reason, you should put only a very small portion of your portfolio in this sector.
There are two USA regulated Bitcoin futures exchanges in operation. The CME’s contract unit is five Bitcoins whereas the Cboe’s contract unit is one—that’s the biggest difference between these futures. The upfront money to buy or sell short a CME contract will be about five times higher than the Cboe contract. Larger investors won’t care but this will be an issue for smaller investors. Another difference is the spot/settlement process that the exchanges use. In the case of Cboe futures, the contracts will be settled to a 4 pm ET Gemini exchange auction price on the day of expiration, for the CME futures the settlement price is a complex calculation using an hour of volume weighted data from multiple exchanges (currently Bitstamp, itBit, Kraken, and GDAX). With the CME’s approach, it will be harder to manipulate the settlement price but it doesn’t give arbitrageurs a physical mechanism to trade their positions—possibly an issue.
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