Crypto bull Barry Silbert said he bet on a leveraged market volatility fund earlier, with some derision … now it’s up around 20% on the week
Barry Silbert, a leading player in the digital asset industry, tweeted earlier this week that he was going to be long on a leveraged volatility product.
Silbert specifically highlighted the ProShares Ultra VIX UVXY short term futures,
which is designed to provide leverage, 1.5 times, to a volatility futures index.
The underlying benchmark UVXY is a leveraged version of what is behind the Barclays iPath S&P 500 VIX Short-Term Futures ETN VXX,
or an exchange-traded note, a heavily traded commodity giving exposure to a set of frequently rebalanced volatility futures contracts that change hands on the CBOE of the Cboe Options Exchange,
UVXY is not the same as exposure to Cboe Volatility Index VIX,
or VIX, but it depends on the market downturn to benefit long owners.
On Friday, UVXY was up about 13% and enjoying an increase of nearly 20% for the week. The jump for the product comes as the Dow Jones Industrial Average DJIA,
recorded its worst weekly decline since the end of January and the S&P 500 SPX index,
and the Nasdaq Composite Index COMP,
came under heavy selling pressure on Friday, inspired in part by a hawkish comment from a Federal Reserve official and a central bank statement on Wednesday that appeared to be less accommodating than investors had hoped optimistic.
Either way, Silbert’s initial tweet about buying UVXY sparked some derision earlier this week, but he appeared to be profiting from leveraged ETF gains on Friday.
For its part, the VIX, which uses option prices on S&P 500 stocks to gauge the benchmark’s implied or expected volatility over the next 30 days, jumped about 16% on Friday to move closer. from the historical average of the index at around 20. The VIX rose more than 32% on the week.
It’s worth noting that Silbert knows a thing or two about stocks: Second Market, a popular exchange for shares of private companies he founded in 2004, was sold to Nasdaq Inc. NDAQ in 2015 for an undisclosed amount. .
In a separate tweet, he warned potential followers of his UVXY bet that the product is not designed for long-term holdings as it will eventually go to zero.
Silbert is considered a luminary in the digital asset world, having founded two of the most well-known companies in the crypto arena: Grayscale Investments, which operates the popular Grayscale Bitcoin Trust GBTC,
Crypto markets were also under pressure on Friday. Bitcoin BTCUSD,
and Ether ETHUSD,
on the Ethereum blockchain were looking at their worst daily declines in about three weeks.