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ProShares wants you to short BTC as its flagship ETF tanks

04:25, 24 June 2022

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ProShares wants you to short BTC as its flagship long ETF tanks Photo: Shutterstock

Asset manager ProShares now lets investors profit from drops in bitcoin (BTC) with its short-based exchange-traded fund BITI. 

Meanwhile its flagship bitcoin-linked ETF, ProShares Bitcoin Strategy ETF, (BITO), which was launched to a great fanfare last October as a first US-listed vehicle of its kind, is 50% down below its all-time high.

ProShares Bitcoin Strategy ETF (BITO)

BITO's listing on the New York Stock Exchange, which was widely seen as a watershed moment for the digital asset sector and an endorsement by Wall Street, sparked a BTC rally which saw the coin hit its then-record high.

Earlier this week, ProShares listed its Short Bitcoin Strategy ETF on NYSE.

“With BITI and its earlier launch of BITO, ProShares is now the first issuer to offer ETFs that provide opportunities when bitcoin increases and decreases in value,” ProShares CEO Michael L. Sapir said in a statement. 

BITO hit $2bn AUM in two days 

The ETF, which was second-most traded on its debut day, reached £1bn assets under management in just two days. 

After the same time, BITI is far from a similar milestone, having accrued £61m assets under management in the same period.

According to Sapir this demonstrates the ETF’s utility and offers traders much needed shorting capability in the cryptocurrency bear market which has seen rollercoaster price ride for coins BTC and altcoins such as SOL alike.

SOL to US dollar 

“The reception that BITI is getting in the market affirms investor demand for a convenient and cost-effective ETF to potentially profit or hedge their cryptocurrency holdings when bitcoin drops in value.”

“BITI can help address the challenge of acquiring short exposure to bitcoin, which can be onerous and expensive for many investors.”

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BTC to US dollar 

“Many cryptocurrency exchanges impose stringent restrictions that make it extremely challenging for investors to short spot bitcoin,” Sapir adds.

But commentators noticed that the ETF was launched too late, and the traders may have missed out on gains from the BTC recent crash.

Bitcoin and bitcoin futures are a relatively new asset class and the market for bitcoin is subject to rapid changes and uncertainty. 

Bitcoin and bitcoin futures are subject to unique and substantial risks, including significant price volatility and lack of liquidity. The value of an investment in the ETF could decline significantly and without warning, including to zero.

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