Strategy´s Yield Hunt Inadvertently Helps the Very Hedge Funds Looking to Short its Bitcoin Premium

Cryptocurrency

Stocks

Summary:

Copying Tether's shift to credit markets exposes a cash flow crisis that threatens its 650,000 BTC stockpile.

Strategy, formerly known as MicroStrategy, is considering a pivot that would fundamentally alter the risk profile of the world’s largest corporate Bitcoin treasury.

For a decade, the company sold Wall Street on a singular thesis: it was a digital vault, offering unencumbered exposure to Bitcoin without the risks of custody or counterparty risk. That stand is changing as it is now exploring an entry into the crypto lending market.

On Dec. 2, Strategy CEO Phong Le told Bloomberg the firm was in talks with banks about lending out its holdings. However, he cautioned that the firm was still waiting for major financial institutions to enter the space before making any decision.

He said: “We’ve had a lot of constructive discussions. They have primarily been: we are thinking about offering Bitcoin services—custody, exchange, lending, etc. You are the largest corporate holder of Bitcoin in the world; what is your advice to us, and should we work together?”

While framed as a maturation of the business, the move exposes the company to re-hypothecation risks that contradict the “cold storage” ethos that built its $55 billion reserve.

Nonetheless, the pivot signals that Strategy is moving from a passive holding company to an active credit desk.

This shift is driven by the need to justify its valuation premium in a market where spot ETFs have commoditized Bitcoin access.

The yield trap

Strategy currently holds 650,000 BTC. Historically, this stockpile has sat idle in the firm’s coffers.

So, lending it out would generate revenue. However, it introduces a paradox as the primary institutional demand for borrowing Bitcoin comes from market makers and hedge funds looking to short the asset.

To understand the risk, one must look at the mechanics of the trade.

In the institutional market, demand for borrowing Bitcoin is rarely for holding, as it is almost exclusively for selling to hedge derivative exposure.

By injecting its massive reserves into the lending market, Strategy would effectively lower the “cost to borrow,” a key friction that typically discouraged short sellers.

Consequently, Strategy would effectively be supplying the inventory used to bet against the price appreciation of its own reserve by opening a lending desk.

Moreover, the move introduces counterparty risk to a balance sheet that had previously been defined by its simplicity.

Notably, the crypto credit market collapsed spectacularly in 2022 after lenders like BlockFi and Celsius mispriced the risk of lending to opaque borrowers.

While Le insists that Strategy will partner only with top-tier banks, the core premise remains that Bitcoin will leave its vault.

So, in the event of a banking failure or a credit seizure, Strategy would transition from an owner of property to an unsecured creditor.

Defending the premium

Meanwhile, Strategy’s search for yield appears tied to its compressing stock valuation.

The company’s model relies on trading at a premium to its Net Asset Value (NAV), allowing it to issue equity at inflated prices to buy more Bitcoin. That premium, once as high as 2.5x, has cooled. As of Dec. 3, Strategy’s multiple to NAV (mNAV) stood at 1.15. Strategy´s Yield Hunt Inadvertently Helps the Very Hedge Funds Looking to Short its Bitcoin Premium_1

Strategy´s Yield Hunt Inadvertently Helps the Very Hedge Funds Looking to Short its Bitcoin Premium_1

In a candid admission, the firm recently admitted that it would consider selling Bitcoin if the mNAV falls below 1.

This creates a potential “reflexivity loop” in the market: if Strategy’s share price falters, the company could be forced to liquidate Bitcoin, driving spot prices down and further depressing the share price.

To prevent this, the Michael Saylor-led firm needs to offer investors something the ETFs cannot: yield.

Moreover, the company recently raised $1.44 billion in equity to cover dividend obligations on its preferred shares, stressing the cash-flow strain of maintaining its current capital structure.

Considering this, lending the Bitcoin stack is one of the only ways to fund these payouts without diluting common shareholders or selling the underlying asset.

A crowded trade

If Strategy enters the lending arena, it faces a market significantly different from the uncollateralized “Wild West” of 2021.

According to Galaxy Digital, stablecoin issuer Tether currently dominates centralized lending with a $14.6 billion book.

However, Tether lends stablecoins (USDT), fueling leverage for buyers. Strategy would be lending Bitcoin, fueling supply for borrowers. Strategy´s Yield Hunt Inadvertently Helps the Very Hedge Funds Looking to Short its Bitcoin Premium_2

Strategy´s Yield Hunt Inadvertently Helps the Very Hedge Funds Looking to Short its Bitcoin Premium_2

In a candid admission, the firm recently admitted that it would consider selling Bitcoin if the mNAV falls below 1.

To prevent this, the Michael Saylor-led firm needs to offer investors something the ETFs cannot: yield.

Moreover, the company recently raised $1.44 billion in equity to cover dividend obligations on its preferred shares, stressing the cash-flow strain of maintaining its current capital structure.

Considering this, lending the Bitcoin stack is one of the only ways to fund these payouts without diluting common shareholders or selling the underlying asset.

A crowded trade

If Strategy enters the lending arena, it faces a market significantly different from the uncollateralized “Wild West” of 2021.

According to Galaxy Digital, stablecoin issuer Tether currently dominates centralized lending with a $14.6 billion book.

However, Tether lends stablecoins (USDT), fueling leverage for buyers. Strategy would be lending Bitcoin, fueling supply for borrowers.

The sheer size of Strategy’s 650,000 BTC reserve significantly dwarfs the collateral pools of competitors like Nexo and Galaxy and could potentially distort the market. If even a fraction of that supply hits the lending desks, the cost to borrow Bitcoin could collapse, crushing yields across the sector.

Essentially, Strategy is betting that it can transform itself from a passive wrapper into a sophisticated financial operator. But in doing so, it risks trading the clarity of “digital gold” for the opacity of structured credit.

For investors who bought Strategy as a proxy for pristine collateral, the vault door is beginning to look worryingly open.

Source: Cryptoslate

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Political

Economic

President Trump rolled back fuel economy rules that he claims created an “EV mandate” after former President Joe Biden imposed stricter fuel economy standards last year.

Trump said the administration was officially terminating Biden’s “ridiculous” CAFE (corporate average fuel economy) rules, claiming car prices would come down in response to today’s action. Automakers are now required to meet an average of 34.5 mpg across their model fleet by 2031, a dramatic drop from the average of 50.4 mpg across 2031 that the Biden administration had proposed.

Trump said the action would allow automakers to produce cheaper cars, saving consumers “[at] least $1,000” off the price of a car.

Ford (F) CEO Jim Farley, Stellantis (STLA) CEO Antonio Filosa, and other auto industry executives were in attendance.

“Today is a victory for common sense and affordability,” Farley said at the event. “This is the right move … We will invest more in affordable vehicles.”

Earlier this year, the Transportation Department and Secretary Sean Duffy paved the way for looser US fuel economy standards by declaring the Biden administration exceeded its authority, assuming increasing EV sales in calculating fleet mile per gallon rules. The prior rules assumed the fuel economy averages for the “fleet” of vehicles available by specific automakers would rise due to the higher uptake of EVs.

Trump also signed legislation this year that ended fuel economy penalties for automakers, with the National Highway Traffic Safety Administration (NHTSA) claiming the industry faced no fines dating back to the 2022 model year. Automakers like Tesla make billions by selling emission credits for these penalties, a source of revenue that will now disappear.

Wednesday’s action furthers Trump’s moves to weaken environmental regulations and aid automakers.

“We’re reviewing NHTSA’s announcement, but we’re glad the agency has proposed new fuel economy standards,” said John Bozzella, president and CEO of the Alliance for Automotive Innovation, the industry’s top trade group.

“We’ve been clear and consistent: The current CAFE rules finalized under the previous administration are extremely challenging for automakers to achieve given the current marketplace for EVs."

Bozzella added, “What’s good for consumers and the auto industry? A stable regulatory environment and balanced, reasonable, achievable standards that continue to reduce emissions and improve fuel economy.”

Public advocacy groups countered the industry’s position.

“The previous fuel economy standards — which the Trump administration has now said it will not enforce — would have saved Americans $23 billion in fuel costs and reduced our national fuel consumption by 70 billion gallons,” said Will Anderson, zero-emission vehicles policy advocate at Public Citizen. “Americans support strong fuel economy standards… [with] two-thirds saying that fuel economy is very important or extremely important.”

Anderson added that the new policy diverts money to “Trump’s oil and gas cronies” at the expense of the American public.

Source: Yahoo Finance

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Manuel

Commodity

Central Bank

Gold prices held steady on Wednesday, buoyed by weak private payrolls data that reinforced expectations of a U.S. interest rate cut next week, while silver hit a fresh record high.

Spot gold was little changed at $4,202.06 an ounce by 2:03 p.m. ET (1903 GMT), after hitting a session high of $4,241.29 earlier in the session.

U.S. gold futures for February delivery settled 0.3% higher at $4,232.50.

Silver steadied after touching a record high of $58.98 earlier in the session.

"This morning's miss on ADP data, combined with silver hitting all-time highs overnight," is supportive for gold, said RJO Futures senior market strategist Bob Haberkorn.

"Gold is following silver at the moment, with silver pulling back a little bit here."

U.S. private payrolls fell by 32,000 jobs in November, Wednesday's ADP employment report showed, missing economists' expectations for a 10,000-job increase.

CME's FedWatch tool now shows an 89% chance that the U.S. central bank will cut rates next week, while major brokerages also forecast an interest rate cut at the December 9-10 policy meeting.

Markets are still awaiting the delayed September Personal Consumption Expenditures data, the Fed's preferred inflation gauge, due on Friday.

Lower interest rates tend to favor non-yielding assets such as gold.

Silver is up 102% so far this year due to concerns about the market liquidity after outflows to the U.S. stocks, its inclusion in the U.S. critical minerals list and a structural supply deficit.

"The strength in silver is due to supply concerns at the exchange levels," Haberkorn said, adding that the metal could touch the $60/oz milestone shortly.

Copper prices also hit a record high on Wednesday on a weaker dollar, supply concerns and tighter availability of metal in warehouses registered with the London Metal Exchange.

Elsewhere, platinum gained 0.9% to $1,652.03 an ounce and palladium rose 0.4% to $1,466.98.

Source: Reuters

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Bond

Stocks

A credit-risk gauge on Oracle Corp. debt closed at the highest level since the financial crisis after a flood of bond sales from tech giants amplified concerns that a bubble is forming in the artificial-intelligence industry.

The cost of protecting Oracle’s debt against default reached its highest since March 2009 on Tuesday, based on end-of-the-day credit derivative prices in New York, rising to about 1.28 percentage point a year, according to ICE Data Services. The price rose nearly 0.03 percentage point from the day before, and has more than tripled from as low as 0.36 percentage point in June.

The gauge pared some of the price gains Wednesday, tightening as much as 0.024 percentage point.

Oracle has effectively sold tens of billions of dollars of bonds in recent months, through note sales in its own name and indirectly through projects that it’s backing. Those debt sales, paired with the fact that Oracle has weaker credit ratings than other cloud-computing giants, have made the company’s credit default swaps a key way for investors to protect themselves from an AI crash.

The rising cost of default protection reflects investor angst over the gap between the massive investments already made in AI and when investors can expect to see productivity gains and an increase in corporate profits. TD Securities’ Hans Mikkelsen warns that the boom echoes previous periods of market mania that have driven asset prices to extremes before falling back to earth.

“We’ve had these kinds of cycles before,” the strategist said in an interview. “I can’t prove that it’s the same, but it seems like what we’ve seen, for example, during the dot-com bubble.”

A representative for Oracle declined to comment.

Morgan Stanley cautioned in late November that Oracle’s growing debt pile risks driving the company’s credit default swaps even closer to 2 percentage points, just above its 2008 all-time high. The figure reached on Tuesday was the highest since a March 2009 level of 1.30 percentage point for a New York close.

Austin-based Oracle, the lowest rated of the leading hyperscalers, sold $18 billion of US high-grade corporate bonds in September and its data centers are linked to the largest deal for AI-infrastructure to come to market. Oracle’s artificial intelligence ambitions are closely linked to OpenAI and the database firm is counting on hundreds of billions of dollars in revenues from OpenAI over the next few years.

Oracle had about $105 billion of debt, including leases, as of the end of August, according to data compiled by Bloomberg. About $95 billion of its debt is now in the form of US bonds included in the Bloomberg US Corporate index. The company is the biggest issuer in the index outside of the banking industry.

Investors have been snapping up hedges on the BBB rated firm’s debt recently. Trading volume on Oracle’s CDS had ballooned to about $8 billion over the nine weeks ended Nov. 28, according to an analysis of trade repository data by Barclays Plc credit strategist Jigar Patel. That’s up from $350 million in the same period last year.

What Bloomberg Intelligence Says

Data-center infrastructure outlays amid seemingly insatiable AI demand are boosting hyperscalers’ borrowing, spurring valuation concerns. Yet this angst may be excessive if the biggest tech companies reduce shareholder payouts. Record tech debt issuance can extend into 2026, but might be tempered by the vast amount of cash on balance sheets and hundreds of billions of dollars available as free cash flow before buybacks and dividends.

Source: Bloomberg

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Economic

Confidence Abroad, Uncertainty at Home

As 2025 ends, China has projected renewed global confidence through strategic responses to U.S. tariffs, breakthroughs in AI, and growing assertiveness in critical resources like rare earths. However, this image contrasts sharply with its domestic economic outlook. While political and technological momentum may bolster China’s standing externally, internal economic data reflect a trifecta of unresolved vulnerabilities: a deteriorating property sector, sluggish household consumption, and deflationary pressures.

These issues are expected to dominate the agenda at the upcoming Central Economic Work Conference, which traditionally outlines the policy direction for the year ahead. Economists are watching for decisive actions that could determine whether China can stabilize its economy or slide further into stagnation.

Property Sector: Deepening Crisis Despite Repeated Interventions

The property market continues to be China’s most destabilizing economic fault line. This year, the financial instability of Vanke, once a symbol of real estate strength, has become a focal point. The company’s request to delay repayment of a 2 billion yuan bond triggered a credit downgrade by S&P Global Ratings, reigniting fears about sector-wide contagion. As confidence among homebuyers erodes, property sales have tumbled, with November figures showing a decline of 20% to 30% year-on-year.

This relationship between developer insolvency and weakening consumer sentiment appears causal. As high-profile firms like Vanke struggle, public confidence diminishes, prompting buyers to delay or cancel purchases, which in turn further depresses developer cash flows. Edward Chan of S&P emphasized that government interventions such as mortgage subsidies are unlikely to reverse the trend without broader structural reforms.

Data from Goldman Sachs and S&P suggest that monthly sales are still more than 65 billion yuan below 2024 levels. Yet, the government has not clarified a threshold that would trigger more aggressive policy responses, leading to continued uncertainty in the sector.

Consumption: Supply-Side Optimism Meets Demand-Side Fragility

Despite Beijing’s efforts to boost domestic demand, structural weaknesses in household finances and labor markets continue to suppress consumption. Policymakers announced ambitious plans to grow consumer industries such as electronics and sports goods, with goals to create several sectors worth over 1 trillion yuan by 2027. However, these strategies are almost entirely focused on expanding supply rather than stimulating real demand.

Goldman Sachs analysts noted that the policy lacks clarity on funding mechanisms and fails to address short-term consumption triggers like employment and income support. The correlation here is instructive: although consumer-facing sectors might grow through investment and innovation, household purchasing power is not keeping pace, and bad loan ratios for consumers have surpassed those of businesses.

Natixis data shows that the household non-performing loan ratio reached 1.33% in the first half of 2025, exceeding the corporate ratio of 1.2%. This signals an imbalance in resilience: businesses can restructure debt or access relief, but households face limited recovery options under continued pressure from housing and job markets.

Deflation: A Symptom of Weak Demand and Price Wars

China’s inflation narrative has shifted from overheating fears to deflation anxiety. While the official headline inflation hovers near zero, the core Consumer Price Index (excluding volatile food and energy prices) rose just 1.2% in October. However, Chief Economist Ting Lu at Nomura pointed out that nearly a quarter of that increase came from gold price surges. Adjusted for that, core inflation stands at a tepid 0.9%.

This low inflation reflects more than just pricing dynamics—it reveals a deeper reluctance among consumers to spend and a hyper-competitive market where firms resort to price-cutting to attract demand. Charlene Chu of Autonomous Research noted that prolonged deflation is discouraging domestic corporate investment, raising the risk of a capital allocation spiral that could suppress productivity and growth in the medium term.

Gene Ma of the Institute of International Finance emphasized that China’s most urgent problem is weak aggregate demand. The drop in investment is particularly concerning, having slowed more rapidly than consumption in 2025. This underscores a potential causal chain where investment downturns, triggered by uncertainty and poor returns, exacerbate income stagnation, which in turn limits consumption, a reinforcing cycle.

Looking Ahead: Signs of Stabilization or Further Risk?

China’s November inflation data, along with industrial production and retail figures due mid-December, will offer critical insight into whether the economic drag is intensifying or plateauing. Analysts anticipate that Beijing may respond with policy stimulus in the spring, aiming to stabilize growth at the start of the next five-year plan.

Meanwhile, the CSI 300 Index remains stable, posting a modest gain of 0.65% for the week and up over 15% year-to-date. The Hang Seng, while more volatile, has climbed nearly 29% in 2025. The offshore yuan has also strengthened to its best level since late 2024, reflecting tentative investor optimism though this could reverse swiftly if policy clarity is not delivered soon.

China's global tech advances and geopolitical assertiveness have strengthened its external narrative, but its internal fragilities remain unresolved. The real estate crisis, consumer insecurity, and deflationary risks are not simply parallel challenges they are interlinked forces that reflect a broader demand-side weakness. Without significant fiscal support, job creation, and direct aid to households, China risks beginning 2026 with a confidence gap that no AI breakthrough or trade summit can easily fill.

Source: CNBC

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Political

Heightened Tensions Overshadow Peace Negotiations

Recent peace talks in Moscow between the U.S. and Russia have ended inconclusively, exposing the fragile diplomatic ground beneath the prolonged Ukraine conflict. Russian President Vladimir Putin, speaking ahead of the meeting, amplified his combative posture, stating that while Russia does not seek war with Europe, it is fully prepared for one should hostilities arise. This remark followed Europe’s firm rejection of previous U.S.-Russia peace drafts, seen as overly accommodating to Kremlin demands.

The five-hour closed-door meeting featured U.S. envoy Steve Witkoff and Donald Trump’s son-in-law Jared Kushner engaging with Putin and senior Russian officials over a draft peace framework. Russian presidential aide Yuri Ushakov described the discussion as constructive yet marked by substantial disagreements. The negotiation centered around a revised 27-point plan, although the specifics remain undisclosed. It is important to note that the U.S. previously introduced a 28-point plan that faced immediate pushback from Kyiv and its European partners, leading to its reduction to 19 proposals for further debate.

Diverging Objectives Deepen the Impasse

Fundamental divisions between Moscow and Kyiv continue to obstruct progress. Russia demands recognition of its control over eastern Ukrainian territories, while also rejecting Western-backed security guarantees for Ukraine. These contrasting visions reflect a core structural conflict that transcends mere negotiation mechanics. Although talks are ongoing, both parties appear to be maneuvering strategically rather than aiming for immediate resolution.

The cause-and-effect dynamic here is clear: Russia’s continued military leverage on the battlefield fuels its diplomatic intransigence, reinforcing the Kremlin’s belief that time and attrition favor its goals. Conversely, Ukraine, though open to peace, finds itself in a precarious position where concessions could undermine national sovereignty and long-term security.

Putin’s Strategic Messaging and Europe’s Concerns

Putin’s assertion that Europe lacks a “peace agenda” and his readiness to confront European forces if provoked should be read as a calculated move to maintain geopolitical pressure. This escalation, paired with the exclusion of European allies and Ukraine from early negotiations, has prompted deep unease within the EU. Officials such as Kaja Kallas, the EU’s foreign policy chief, have publicly stated that Russia shows no genuine interest in peace and that strengthening Ukraine militarily remains a top priority.

The causal relationship between Europe’s exclusion from the process and its growing distrust of U.S.-Russia diplomacy illustrates how sidelined stakeholders are unlikely to support or enforce any agreement perceived as illegitimate or imbalanced.

Washington’s Calculated Optimism Meets Kyiv’s Hopeful Resolve

Despite the setbacks, Ukrainian President Volodymyr Zelenskyy has attempted to project optimism, telling Irish lawmakers that Ukraine is “closer to peace than ever before.” However, such confidence may reflect a strategic posture rather than a genuine assessment, especially as speculation grows about the U.S. potentially leaning toward a resolution that prioritizes expedience over equity.

There is also a nuanced correlation between Trump’s historically warmer stance toward Putin and growing European fears that U.S. negotiations could shift in favor of Russia’s interests, particularly if seen as a way to accelerate an end to the war ahead of electoral cycles.

Protracted Diplomacy Serves Moscow’s Broader Goals

Several analysts interpret Russia’s approach as a deliberate effort to prolong the peace process. Michael Froman of the Council on Foreign Relations argues that Putin seeks more than a ceasefire his aim is to open broader discussions on Russia’s reintegration into the Western economic and diplomatic sphere. This longer timeline benefits Moscow by allowing continued assaults on Ukraine’s infrastructure while maintaining diplomatic appearances.

The correlation between prolonged negotiations and Russia’s ability to sustain its war economy supports this view. Amos Hochstein, a former Biden advisor, concurs, noting that the Russians are not in a hurry to settle. He emphasizes the difficulty of brokering a deal that requires Ukraine to concede land in exchange for vague security promises, a scenario that could provoke significant internal and external backlash.

In the absence of trust, clarity, and inclusion, the current peace efforts risk stalling indefinitely. While diplomatic channels remain open, the underlying power asymmetry and conflicting strategic objectives of Russia, Ukraine, and their allies make any near-term resolution unlikely. The relationship between battlefield realities, geopolitical agendas, and fragile diplomacy ensures that the Ukraine conflict will remain a central feature of European insecurity for the foreseeable future.

Source: CNBC

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Political

Stocks

The US Securities and Exchange Commission has issued a flurry of warning letters to some of the country’s most prolific providers of high-octane exchange-traded funds, effectively blocking the introduction of products designed to deliver three and even five times the daily returns of stocks, commodities and cryptocurrencies.

In a set of nine almost identical letters posted Tuesday, the SEC told firms including Direxion, ProShares and Tidal that it would not move forward with reviewing proposed launches until key issues are addressed. At the heart of the regulator’s concern is that the funds’ risk exposures may exceed SEC limits on how much risk a fund can take on relative to its assets. The letters direct the fund managers to either revise their investment strategies or formally withdraw their applications.

At least one issuer has acted since the letters were published. On Wednesday, ProShares asked to withdraw its application for various 3x funds, including triple-leveraged cryptocurrency products.

“We write to express concern regarding the registration of exchange-traded funds that seek to provide more than 200% (2x) leveraged exposure to underlying indices or securities,” the SEC wrote to all nine applicants.

The move marks a rare pause in an otherwise permissive stretch for US fund approvals, which has seen a green light given to crypto-linked ETFs of all stripes, private-asset vehicles and increasingly complex trading strategies. The funds now under scrutiny are on the extreme edge of that trend — combining high leverage, daily trading resets and exposure to some of the most unstable corners of the market, including single-name stocks and digital tokens.

A central concern for the SEC is that the funds appear to be measuring their risk against a benchmark that may not fully reflect the volatility of the assets they aim to amplify.

“The issuers were aiming to go beyond the 2x limit allowed and the is SEC clearly not comfortable with that,” said Todd Sohn, a senior ETF strategist at Strategas. “Issuers were trying to get a workaround in some of the language, loopholes in a sense on what the ‘reference asset’ was on the funds.”

Some of the funds mentioned in the letters are by Volatility Shares which filed to launch ETFs with five times leverage. The funds were aimed at boosting the daily return of some of the most volatile assets including single stocks like Tesla Inc. and Nvidia Corp., as well as cryptocurrencies such as Bitcoin and Ether. No 5x — or even 3x — single-stock ETF currently exist in the US, with SEC rules having long kept a lid on such exposure effectively capping it at 2x leverage.

Leveraged products use options to amplify returns, and they’re popular with investors because they can offer big profits quickly. Trading volumes have boomed since the pandemic as traders look for a new edge in fast-moving markets while assets have climbed to $162 billion. Leveraged ETFs have endured their share of criticism in recent years, with skeptics saying they tempt amateur investors with products that are both risky and opaque. In Europe, GraniteShares was forced to shutter its 3x Short AMD exchange-traded product in October after a big one-day surge in the shares of Advanced Micro Devices Inc. wiped out its value.

Staff in the SEC’s Division of Investment Management publicly posted the letters the same day they were written — an unusually speedy move that suggests the regulator wants to get its concerns out fast. The agency typically posts correspondence with firms 20 business days after wrapping up reviews.

An SEC spokesperson said the agency doesn’t comment on active registration matters.

Representatives of Direxion, ProShares and Tidal didn’t respond to requests for comment. A representative for ETF Series Solutions declined to comment. An attorney for Volatility Shares said the company was in discussions with the regulator but couldn’t provide further details.