ProShares Wants You to Short Bitcoin Through Its New ETF

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ProShares Wants You to Short Bitcoin Through Its New ETF
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key takeaways

ProShares will launch its first Bitcoin short ETF on June 21. The ETF will allow investors to hedge their cryptocurrency holdings or potentially profit from a drop in bitcoin prices. Bitcoin is currently trading down 70% from its all-time high.

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ProShares has just announced the launch of a new Bitcoin futures ETF that will allow investors to “conveniently” profit from falling prices. The company is the first to offer a Bitcoin futures ETF in October 2021.

ProShares Launches Short Bitcoin ETF

ProShares is launching the first Bitcoin short ETF.

according to Monday’s Press Release, the ProShares Short Bitcoin Strategy (BITI) will provide investors with a mechanism to hedge their crypto exposure or profit from falling Bitcoin prices. The ETF is designed to provide the opposite performance of the S&P CME Bitcoin Futures Index and will launch on June 21.

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Short selling is a trading strategy that involves selling an asset in the market with the expectation of buying it at a lower price in the future. Investors “go short” when they think an asset will depreciate. In crypto trading, short-sellers expect a possible drop in Bitcoin price.

“As recently indicated, Bitcoin’s value may decline,” ProShares CEO Michael Sapir said in a press release.Bitcoin is trading At press time around $20,600, down about 70% from its November 2021 peak of $69,000. Sapir said the ETF will help investors take advantage of bitcoin’s price volatility, giving them “convenient” access to short positions.

ProShares will also launch a short Bitcoin mutual fund (BITIX) on the same day through its affiliated mutual fund firm ProFunds. BITI and BITIX share the same investment objectives.

Memorably, ProShares launched the first bitcoin-based ETF in the US in October 2021, giving investors the first direct exposure to the top cryptocurrencies through traditional stock exchanges. The company’s bitcoin futures ETF, available under the ticker BITO, attracted more than $1 billion from investors in its first two days.

Crucially, all of ProShares’ ETFs maintain exposure to Bitcoin through futures contracts.The SEC has so far thwarted all efforts by several companies to launch bitcoin spot ETFs in the U.S. Crypto investment firm Grayscale is currently working on political campaign The SEC allowed it to convert its Bitcoin Private Trust (GBTC) into such a product, but the SEC has yet to make a decision.

Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.

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