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Crypto: Crypto bull Barry Silbert said he bet on a leveraged stock-market volatility fund earlier, to some derision…now it’s up about 20% on the week

Barry Silbert, a power player in the digital-asset sector, earlier this week tweeted that he was going to go long on a leveraged volatility product.

Silbert pointed specifically to the ProShares Ultra VIX Short-Term Futures
UVXY,
+13.15%
,
which is designed to offer leveraged exposure, 1.5 times, to an index of volatility futures.

The underlying benchmark for the UVXY is a leveraged version of what’s behind the Barclays iPath S&P 500 VIX Short-Term Futures ETN
VXX,
+8.78%
,
or exchange-traded note, a heavily traded product giving exposure to a frequently rebalancing set of volatility futures that change hands on the Cboe Options Exchange’s
CBOE,
-3.37%

 futures market.

The UVXY isn’t the same as exposure the Cboe Volatility Index
VIX,
+16.62%
,
or VIX, but it does depend on markets going down to be a benefit to long owners.

On Friday, the UVXY was up by about 13% and enjoying a nearly 20% rise for the week. The jump for the product comes as the Dow Jones Industrial Average
DJIA,
-1.58%
,
logged its worst weekly decline since late January and the S&P 500 index
SPX,
-1.31%

and the Nasdaq Composite Index
COMP,
-0.92%

came under heavy selling pressure on Friday, inspired partly by a hawkish comment from a Federal Reserve official and a statement from the central bank on Wednesday that appeared to be less accommodative than had been hoped by bullish investors.

In any case, Silbert’s initial tweet about purchasing UVXY was met with some derision earlier this week, but he seemed to be enjoying the leveraged ETFs gains on Friday.

For its part, the VIX, which uses options prices on S&P 500 stocks to gauge implied, or expected, volatility for the benchmark over the coming 30-day period, jumped around 16% on Friday to near the index’s historical average at around 20. The VIX rose more than 32% on the week.

It is worth noting that Silbert knows a thing or two about equities: Second Market, a popular trading exchange for private-company stock that he founded in 2004, was sold to Nasdaq Inc. NDAQ in 2015 for an undisclosed sum.

In a separate tweet he cautioned would-be followers of his UVXY bet that the product isn’t designed for long-term holdings because it will eventually go to zero.

Silbert is considered a luminary in the world of digital assets, after founding two of the most widely known enterprises in crypto: Grayscale Investments, which runs the popular Grayscale Bitcoin Trust
GBTC,
-4.67%
.

Crypto markets were also under pressure on Friday. Bitcoin
BTCUSD,
-0.13%

and Ether
ETHUSD,
+0.35%

on the Ethereum blockchain were looking at their worst daily declines in about three weeks.

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