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ProShares Launches Futures ETF That Lets Investors Bet Against Bitcoin Gains

ProShares Launches Futures ETF That Lets Investors Bet Against Bitcoin Gains

ProShares Short Bitcoin Strategy ETF is scheduled to begin trading on the NYSE on Tuesday.

By Shomik Sen Bhattacharjee | Updated: 21 June 2022 12:43 IST

ProShares Launches Futures ETF That Lets Investors Bet Against Bitcoin Gains

Photo Credit: Pixabay/ Digital Designer

The ProShares Short Bitcoin Strategy ETF will be introduced under the BITI ticker

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Highlights

The launch of the investment vehicle comes amid a bear market
ProShares launched the first Bitcoin futures ETF in the US in October
Bitcoin prices peaked in 2021 following the launch of BTC futures ETFs

ProShares, an issuer of exchange-traded funds (ETFs), says it will launch the first US short Bitcoin-linked ETF on 21 June. The ProShares Short Bitcoin Strategy ETF, which will debut under the BITI ticker, will give investors the opportunity to profit from a decline in Bitcoin's price, or to hedge their exposure to crypto, according to a statement. Short selling is an investment strategy that speculates on an asset falling in value, compared with more traditional bets on potential increases among stocks, bonds, or cryptocurrencies.

"As recent times have shown, Bitcoin can drop in value," ProShares CEO Michael L. Sapir said in a statement. "BITI affords investors who believe that the price of Bitcoin will drop with an opportunity to potentially profit or to hedge their cryptocurrency holdings."

Investors, he added, can "conveniently obtain short exposure to bitcoin through buying an ETF in a traditional brokerage account." Alternatively, investors will also have the option of investing through ProFunds, an affiliated mutual fund company of ProShares, which will launch a short Bitcoin strategy ProFund (BITIX) on 21 June.

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Bitcoin ETFs that track the price of cryptocurrencies are popular in the US because the country's Securities and Exchange Commission (SEC) has been slow to approve a spot Bitcoin ETF product.

In October, the SEC finally approved the first Bitcoin futures ETF, which was also a ProShares product. While the original Bitcoin futures ETF was launched to provide institutional and retail investors access to the asset without dealing with technical complications or legal hurdles. Similarly, the Proshares short ETF will provide institutions access to play towards negative sentiment without interfacing with those same hurdles in a compliant manner.

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Bitcoin's price dropped below $20,000 (roughly Rs. 15.6 lakh) for the first time since 20 December 2021 on 18 June, falling as low as $17,800 (roughly Rs. 13.9 lakh) the following day. At the time of publishing, the world's largest cryptocurrency has recovered to a price of $21,102 (roughly Rs. 16.5 lakh).

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