ProShares, an exchange-traded fund (ETF) provider, today announced a new product that will allow investors to bet against Bitcoin—a U.S. first.
The ProShares Short Bitcoin Strategy ETF, slated to begin trading under BITI on the New York Stock Exchange on Tuesday, provides an opportunity to profit if the price of the world’s biggest digital asset declines.
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. An ETF is an investment product that allows investors to buy shares that represent an asset.
ARK's Cathie Wood: 'Doesn't Make Sense' No Bitcoin Spot ETF Yet
On April 1, Cathie Wood's ARK Invest became the latest applicant to get denied by the SEC for a Bitcoin spot ETF. The ETF would have traded on the Cboe in partnership with 21Shares and Coinbase, and the parties first submitted their application last June—so it took nearly a year to get a response, and the response was a No. What will ARK do next? "We will reapply," said Wood on stage at the FTX/SALT Crypto Bahamas conference on Wednesday. Wood continued: "I find it fascinating they have approved...
“As recent times have shown, Bitcoin can drop in value,” ProShares CEO Michael L. Sapir said 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.”
The launch of the ETF comes at a time when Bitcoin—and the entire crypto market—has plummeted. At the time of this writing, Bitcoin was trading for $20,306.37, according to CoinMarketCap. Last November, it hit an all-time high of $68,789.63.
BITI supposedly delivers the inverse of the performance of the S&P CME Bitcoin Futures Index, and it will obtain exposure through Bitcoin futures contracts.
Bitcoin ETFs that track the price of cryptocurrencies are popular in the U.S. because the SEC has been slow to approve a spot Bitcoin ETF product.
In October, the SEC finally approved the first Bitcoin futures ETF—another ProShares product.
