The issuer of financial products ProShares presents today, Tuesday, June 21, a new ETF (English acronym for «exchange-traded product») that will have a quite particular behavior: when the price of bitcoin (BTC) falls, the price of the ETF will go up and vice versa.
This is so because this ETF will track the performance of the S&P CME Bitcoin (BTC) Futures Index in reverse. The project is disclosed in the midst of a bear market for the main cryptocurrency.
Apparently, the idea of ProShares with this financial product is to capture those investors who are pessimistic about the projection of the price of bitcoin. Through this futures ETF called Short Bitcoin Strategy ETF (BITI), these people could take advantage of an eventual decrease in the market value of the crypto asset.
“We all know that there are many people who are pessimistic about the short-term or long-term prospects of Bitcoin or cryptocurrencies in general,” told the Barrons portal Michael Sapir, CEO of ProShares.
A similar ETF already exists in the market, traded more precisely by the Canadian company Horizons ETFs Management. It was launched in April 2021, as reported by CriptoNoticias.
Details of the ETF that bets on the fall of bitcoin
At the time of writing this article, the price of bitcoin is USD 20,738 according to the CriptoNoticias price index. As reported in this newspaper, some analysts consider that the value of the cryptocurrency you have reached your floor in this bear market, although there are those who predict that it will reach lower values in the near future.
If the latter were to happen, the ProShares ETF would come at just the right time. From this Tuesday, June 21, the financial product It is now available on the New York Stock Exchange.
ETFs, a gateway to bitcoin for large investors
ETFs represent an alternative for large investors, especially institutional ones, to have exposure to bitcoin. For example, this medium reported in April 2022 the request to create an ETF of this type in Australia that, finally, it ended up being approved.
In the case of BITI, ProShares highlights on their official site several advantages of trading this financial product instead of opening short positions on other platforms. As seen in the image below, it is emphasized that it does not require adding funds to the account to maintain liquidation margins and it is also not possible to lose more money than has been invested.
ProShares is a company that already has an ETF similar to the one it is now announcing, but with the difference that it follows the current price of bitcoin and is not traded based on potential future values. That ETF already has more than $640 million under management, rising to $1 billion shortly after launch, according to reports BeInCrypto.