Proshares wants to launch the first short-bitcoin ETF in the USA

The first exchange-traded Short Bitcoin product in the USA will launch

Proshares today, which offers investors a new way to benefit from a continued sale of digital tokens.

The step of Proshares takes place because the Bitcoin price from its all-time high in November fell by almost 70 percent to $ 20,500.

The step is also in a sharp contrast to the intoxicating days in October 2021, when Proshares was the first to get to the US market with a long-bitcoin futures ETF. The Proshares Bitcoin Strategy ETF (Bito) rose to over 1 billion in assets within two days at one of the hottest ETF starts ever.

The Bitcoin slump is only a strand in a wider bloodbath for cryptocurrencies and other digital assets such as not fungal tokens.

According to data from Trackinight, the combined global managed assets of stock market -traded crypto products from a maximum of $ 19.5 billion broke into $ 54 percent to $ 8.9 billion in November.

"We are optimistic that there will be interest in the fund, especially in view of what has happened on the market in recent months and especially in the past week," said Michael Sapir, Chief Executive of Proshares, who manages $ 62 billion.

Nate Geraci, President of The Etf Store, regretted that he expected “a fairly robust market” for short-bitcoin ETFs, “because they offer a comfortable and relatively inexpensive way to shorten the price of Bitcoin”.

"I have no doubt that you will find an audience, especially in view of the current cryptoma market field. There is certainly no lack of bitcoin duration bears out there, which are firmly convinced that this thing will go to zero," he added.

How Bito will act the proshares Short Bitcoin Strategy ETF (BITI) with futures contracts that are listed at Chicago Mercantile Exchange, and not with the "physical" currency itself.

Like all inverse ETFs, it is designed to offer an inverse commitment in the daily return of Bitcoin minus fees and costs, and will probably deviate if it is kept over longer periods.

as such it will have a similar structure as the BetaPro inverse Bitcoin ETF (Biti) from Horizon ETFs of 44 million CAD ($ 34 million), which was launched in April 2021 on the Toronto stock exchange and achieved a return of 142 percent in November.

The only other inverse ETP is the $ 21.6 million expensive 21shares Short Bitcoin ETP (SBTC), which is listed in Europe, which generates a short engagement by borrowing Bitcoin and the sale on an execution platform. He has repaid 127 percent since November.

with an administrative fee of 0.95 percent in addition to the "roll costs" that are inherent in the futures trade, the ETF will be cheaper than any of the existing products. A sister fund is also launched.

SAPIR said that US investors who believed that the Bitcoin price would probably fall are currently "very limited and complicated ways to get short engagement".

Some cryptocurrency exchanges offer short engagements, but this includes the opening of an account, the establishment of a margin and possibly high fees. Another option would be for investors to act directly with futures contracts.

"to be able to use the advantages of an ETF, the liquidity and user -friendliness, would be an advantage over the attempt to shorten Bitcoin directly," said Todd Rosenbluth, research manager at Vettafi.

The example of Proshares could soon follow the "alternative" investment group AXS Investments, which applied for the introduction of a Short Bitcoin Strategy ETF (SBCO) at the beginning of April.

axs said it was around the submission in a "quiet phase" and could not discuss it.

Direxion, which specializes in besides thematic for levered and inverse ETFs, has also applied for a Bitcoin Strategy Bear ETF that could shorten swaps, futures and long-bitcoin ETFs such as Bito. Direxion refused to comment.

Despite the slaughter on the cryptom market, ETP investors do not seem to be ready to throw the towel. The net inflows in the sector have been positive in each of the last four weeks in the past four weeks and, according to the Trackinight, amounted to a total of $ 507 million.

"Incredible, but true. Court. Crypto ETPs are still moving in this year, although their return has been minus 46 percent since the beginning of the year," said Philippe Malaise, founder and owner of Trackinight.

"A majority of investors sees the current drawdown as a unique opportunity to build up a position or increase its current commitment to reduce their average costs," added Malaise.