ProShares Launches ETF Allowing Investors to Short Bitcoin

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Foremost crypto investment firm ProShares has launched a new product that allows investors to bet against Bitcoin’s price.

The firm is looking to capitalise on the current market downturn to boost investor exposure to Bitcoin, and it is doing so with a new exchange-traded product.

Capitalising on the Downturn

On Monday, ProShared announced that it had issued its Short Bitcoin Strategy exchange-traded fund (ETF). The ETF will trade under the ticker BITI on the New York Stock Exchange (NYSE). ProShares explained that its new ETF would allow investors to bet against Bitcoin’s price using futures contracts. The ETF will track the leading asset’s performance in a day with figures derived from the Bitcoin futures index at the Chicago Mercantile Exchange (CME).

In the announcement, ProShares chief executive Michael Sapir explained that BITI affords investors who believe that the price of Bitcoin will drop an opportunity to profit or hedge their cryptocurrency holdings. He added that these investors can now obtain short exposure to Bitcoin by purchasing the ETF from a traditional brokerage account. This is in addition to a litany of some of the best Bitcoin ETFs already available in the market.

The product’s launch signifies ProShares’ attempt to capitalise on Bitcoin’s falling price. Over the past weekend, the digital asset dropped below $20,000 for the first time in 18 months. Although Bitcoin has since started on the path toward a rebound, investor sentiment remains relatively mixed.

ProShares is one of the companies actively pushing for Bitcoin investment products, particularly ETFs. The company was one of the first to launch a Bitcoin futures ETF last year, getting approval from the Securities and Exchange Commission (SEC) to launch its Bitcoin Strategy ETF. This ETF was the first exchange-traded product that allowed American investors to gain direct exposure to cryptocurrency futures.

But, with the market downturn currently dragging cryptocurrencies further down, shares of the Bitcoin Strategy ETF have fallen significantly since its launch. Data from the NYSE indicates that the investment product has fallen by about 68%, mirroring the decline in mainstream crypto prices.

The Elusive Spot Bitcoin ETF

While ProShares continues to work around regulatory requirements, the push for a spot Bitcoin ETF continues. Companies continue to file with the SEC for the opportunity to launch a pure-play Bitcoin ETF, but the financial watchdog has continued to decline every application.

Speaking at a conference last week, Hester Pierce, one of the most crypto-friendly commissioners at the SEC, criticised the agency for its lack of pace with regard to crypto regulation and asset clarity in the market. Pierce pointed to this tardiness as the major reason spot Bitcoin ETFs haven’t been approved, adding that there would likely not be any approval until the regulatory problem has been solved.

Still, Pierce offered some hope, explaining that regulators could solve the problem by working with industry experts on proper regulatory guidelines for the fledgling crypto industry. All that remains, according to Pierce, is for the Commission to lead well in this campaign.

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