Eight months after launching the first bitcoin futures ETF, ProShares, a provider of bitcoin-linked exchange-traded funds (ETFs), announced Monday that it plans to launch an ETF aimed at shorting the world’s largest cryptocurrency.
Called the ProShares Short Bitcoin Strategy ETF, the fund will offer investors a way to potentially profit from or hedge against a drop in the price of bitcoin. cryptocurrency exposure with an ETF, the company said in a statement. It aims to address the challenge of obtaining low exposure to bitcoin, which can be difficult and costly for many investors.
“As recent times have shown, Bitcoin Prices could drop,” ProShares CEO Michael Sapir said in a statement. “BITI enables investors to easily obtain low exposure to bitcoin by purchasing an ETF in a traditional brokerage account.”
For investors who prefer mutual funds, ProFunds, the affiliated mutual fund company of ProShares, is planning to launch the short bitcoin strategy ProFund (BITIX) on Tuesday. The investment objective of BITIX Mutual Fund will be similar to that of BITI. BITI will be the first ETF of its kind in the US.
BITI is designed to deliver contrast to the performance of the S&P CME Bitcoin Futures Index and seeks to gain exposure through bitcoin futures contracts, the company said.
In October last year, ProShares launched the ProShares Bitcoin Strategy ETF, the first US bitcoin-linked ETF to attract more than $1 billion in assets from the public in two days.
However, the crypto market is currently in a free fall, with Bitcoin leading the way. Bitcoin fell below the key $20,000 level for the first time since December 2020. On Monday, it hit a session low of $19,616.10 and was down 2.2% at $20,112.
Since the start of the year, bitcoin has lost 59% of its value against the US Dollar. The digital asset has been selling off along with other riskier holdings throughout the year as global central banks hike interest rates to curb rising inflation.
Developments such as lender Celsius freezing withdrawals and decentralized-finance applications taking unprecedented measures to protect themselves from cascading liquidations have led to further uncertainty in the industry.