The post Wall Street’s VIX funds surge past $1 billion as traders continue betting on a market crash appeared on BitcoinEthereumNews.com.

Wall Street traders have driven funds tied to the VIX beyond $1 billion this year, with money rushing into exchange-traded products that track Cboe Volatility Index futures as investors brace for turbulence in stocks after a record rally. The Barclays iPath S&P 500 VIX Short-Term Futures ETN, the biggest of these vehicles, has grown by more than 300% in 2025. The appeal is straightforward. If the stock rally breaks, volatility will soar and these products will pay out. But while they wait for that moment, investors face steep costs that eat away at returns. These costs are built into how the funds work. Bloomberg Intelligence senior ETF analyst Eric Balchunas called them “a chainsaw — very effective at certain jobs, but it can cut your arm off.” He was referring to the way the funds lose money when market swings expected in the future exceed those happening now. Timing is everything. Anyone who bought the Volatility Shares 2x Long VIX Futures ETF on April 1 before sweeping US tariffs hit would have tripled their money by selling on April 8. But holding that same fund for a year would have produced a 78% loss. This risk hasn’t stopped inflows. VXX is down 32% with $1 billion in assets and 312% net inflows. UVIX is down 78% with $510 million and 215% inflows. UVXY is down 57% with $690 million and 150% inflows. VIXY is down 33% with $343 million and 115% inflows. All four funds show how money keeps flowing into VIX products even as their performance bleeds. Investors increase VIX holdings while costs mount Michael Thompson, co-portfolio manager at Little Harbor Advisors, said “these can increase in price pretty dramatically, almost like an option but without an expiration date.” He added that if a correction doesn’t happen on schedule,…

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Filed under: News - @ September 28, 2025 7:28 pm