First short Bitcoin ETF prepares for launch

ProShares Short Bitcoin Strategy ETF launches at a time of heightened Bitcoin price volatility

The Bitcoin (BTC) logo                                 
ProShares CEO Michael Sapir says BITI will help investors hedge their crypto holdings – Photo: Shutterstock
                                

The first short Bitcoin exchange traded fund (ETF) in the United States will launch on Tuesday, expanding the ways in which investors and traders can interact with the world’s largest cryptocurrency. 

BITI

The ProShares Short Bitcoin Strategy ETF (BITI) will reverse the performance of an index of Bitcoin futures. The product is designed for predominantly short-term use. It returns the inverse performance of its underlying index one day at a time, essentially resetting every day. 

The ETF may prove to be popular given the marked return to volatility that Bitcoin has experienced in recent weeks. BTC fell by as much as 44% in 12 days this month, from $31,350 to a low of $17,601.

Indeed, having started the year with a market capitalisation of $900bn, Bitcoin’s total value stood at $385bn (£315bn) on Wednesday. 

Sapir

Hailing the new product, ProShares CEO Michael Sapir stated: “As recent times have shown, Bitcoin can drop in value. BITI affords investors who believe that the price of Bitcoin will drop with an opportunity to potentially profit or to hedge their cryptocurrency holdings.”

He added: “BITI enables investors to conveniently obtain short exposure to Bitcoin through buying an ETF in a traditional brokerage account.”

ProShares, which has spearheaded the rise of exchange-traded funds since 2006, launched the first US Bitcoin ETF in October 2021. In less than two days, the ProShares Bitcoin Strategy ETF (BITO) attracted over $1bn of investment from the public, making it the most successful ETF launch in the history of the industry. 

Having stood at $44.29 when Bitcoin reached its all-time high of $68,789, BITO stood at $12.60 at the time of writing on Wednesday 22 June, some 71.5% lower.

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