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ProShares to Come Up With the First Short Bitcoin ETF In the US

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by Bhushan Akolkar · 2 min read
ProShares to Come Up With the First Short Bitcoin ETF In the US
Photo: Depositphotos

The ProShares Short Bitcoin Strategy ETF (BITI) will allow users to profit from Bitcoin’s declining prices. It will also provide users with a hedge to their crypto exposure via an ETF.

ProShares, one of the most leading providers of exchange-traded funds (ETFs) in the United States is coming up with a new ETF aimed at shorting the world’s largest cryptocurrency. Dubbed ProShares Short Bitcoin Strategy ETF (BITI), the fund will provide a way for investors to profit from Bitcoin‘s declining prices. The announcement comes just at a time when Bitcoin has faced a brutal price correction so far in 2022. The plan will also allow investors to hedge their crypto exposure via an ETF.

Over the last year, ProShares has been active in the crypto space and launched its Bitcoin futures ETF eight months back. The company filed for the short Bitcoin-linked ETF with the US SEC two months back in April.

The ProShares Short Bitcoin Strategy ETF will trade on the New York Stock Exchange (NYSE) under the ticker BITI. It will come with an expense ratio of 0.95%. Thus, BITI aims to address the challenges of getting short exposure to Bitcoin which could usually be expensive for investors. Commenting on this development, ProShares CEO Michael L. Sapir said:

“As recent times have shown, bitcoin can drop in value. BITI affords investors who believe that the price of bitcoin will drop with an opportunity to potentially profit or to hedge their cryptocurrency holdings. BITI enables investors to conveniently obtain short exposure to bitcoin through buying an ETF in a traditional brokerage account.”

Here’s How BITI Will Function

The ProShares Short Bitcoin Strategy ETF (BITI) will deliver the inverse performance of the S&P CME Bitcoin Futures Index. Investors who are willing to have a mutual fund kind of exposure can gain it through ProFund. The Short Bitcoin Strategy ProFund (BITIX) will have the same investment objective as BITI. This will also be the first ETF for shorting Bitcoin in the US.

As said, Proshares launched its Bitcoin Strategy Fund (BITO) last year in October 2021. Shares of BITO started trading at a price of $40 per share. Since then, the shares have fallen more than 68% in tune with the Bitcoin price fall.

Sapir said: “With the additions of BITI and BITIX, ProShares and ProFunds will be the only fund families in the US offering funds that allow investors to express their view on the direction of bitcoin – no matter whether they believe the price will go up or down”.

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