By
Chimamanda U. Martha
April 26th, 2024
Away from the ProShares ETF news, the market is adapting to the introduction of spot Bitcoin ETFs.
In a bold move to amplify its Bitcoin offerings ProShares, a leading provider of Exchange-Traded Funds (ETFs), has filed prospectus materials for five leveraged and inverse Bitcoin ETFs.
This move comes just days after the Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs, marking a new era in the acceptance and integration of cryptocurrencies into traditional financial markets.
The ProShares ETFs
The five funds introduced by ProShares include ProShares Plus Bitcoin ETF, ProShares Ultra Bitcoin ETF, ProShares UltraShort Bitcoin ETF, ProShares Short Bitcoin ETF, and ProShares ShortPlus Bitcoin ETF. One of these funds aims to deliver daily investment results that correspond to two times (2x) the daily performance of the Bloomberg Galaxy Bitcoin Index.
However, it’s important to note that two of the funds do not directly invest in Bitcoin, and three do not directly short Bitcoin, according to ProShares’ filing. This diversified approach suggests that ProShares aims to cater to various investor preferences and risk appetites within the crypto space.
Nate Geraci, president of investment advisor The ETF Store, commented on the development and speculated that ProShares’ products may not find a place on platforms like Vanguard Group.
ProShares files for leveraged & inverse bitcoin ETFs…
+1.5X, +2X, -1X, -1.5X, and -2X
Quickly getting wild.
Vanguard definitely won't have these on their platform. pic.twitter.com/8unjgNfSVZ
— Nate Geraci (@NateGeraci) January 16, 2024
It is worth mentioning that Vanguard, the world’s second-largest asset management company with $7.3 trillion in Assets Under Management (AUM), has chosen not to offer spot bitcoin ETFs on its brokerage platform.
Citing concerns over Bitcoin’s high volatility, Vanguard has blocked users from buying the newly approved Bitcoin spot ETFs, including BlackRock Inc’s (NYSE: BLK) iShares Bitcoin Trust and Grayscale Bitcoin Trust. This decision has led to dissatisfaction among users, with some considering a shift to other platforms aligning more closely with their investment philosophy.
While Vanguard takes a cautious stance, other financial giants like Citigroup and Charles Schwab have embraced the trend, with both financial institutions confirming their support for spot Bitcoin ETF trading. This divergence in approaches highlights the ongoing debate within the financial industry regarding the integration of digital assets into traditional investment portfolios.
Similarly, the New York Stock Exchange (NYSE) has filed for the listing and trading of options on Commodity-Based Trust Shares, specifically targeting spot bitcoin ETFs.
Furthermore, Grayscale Investments has filed for a covered call ETF, aiming to generate income from a position in its converted Grayscale Bitcoin Trust (GBTC). This move signifies a continued effort by established investment firms to explore innovative ways to participate in the crypto market.
Anticipation Builds for Bitcoin Halving
Away from the ProShares ETF news, the market is adapting to the introduction of spot Bitcoin ETFs. To complement this, the crypto community is eagerly awaiting the upcoming Bitcoin halving, now just 93 days away. The event marks the fourth Bitcoin halving, a process that periodically reduces block rewards, enhancing Bitcoin’s scarcity and reinforcing its appeal as a store of value.
Anthony Scaramucci, founder of SkyBridge Capital, adds to the excitement by predicting a bullish $170,000 Bitcoin price. This excitement over the halving emphasizes the importance of these supply-driven events in establishing Bitcoin’s long-term value proposition.
