The prices of cryptocurrencies have fallen hard, but it is relatively complicated to short to go on bitcoin (BTC) and other crypto. The most common way is still by shorting futures, but that is not accessible to everyone. ProShares now wants to make it easier by introducing a exchange traded fund (ETF), or publicly traded fund, for bitcoin shorts.

Another Bitcoin Futures ETF

That writes ProShares in one press release† ProShares CEO Michael Sapir explains that bitcoin may also fall in price, as we have seen in recent months. Investors and traders can still make a profit on a price drop by shorting futures.

The New ETF Will Invest Bitcoin Futures From The Chicago Mercantile Exchange (CME) as an underlying asset, just like ProShares’ long BTC ETF (BITO)† The ticker of the new ETF is BITI. There is still no ETF in the US that directly uses bitcoin as an underlying asset.

The main advantage of ETFs is that they are easy to buy. With a ‘normal’ stock trading account you can quickly access it, and also large institutions, who can’t just create an account on a crypto exchange. invest in crypto with an ETF. A lot of institutional money can therefore reach the market in this way.

The downside of a futures ETF is that it must be actively managed. This means that you pay a fee to the fund, while the commission of a passive fund is often much lower and is not passed on to the trader. Also, the price of a futures ETF may differ from the “real” market, although ProShares The Wall Street Journal denies.

Striking Timing for a Bitcoin Short ETF

you can you wondering whether the market has not already found an important bottom, now that the price has fallen by about 70%. It is noticeable that the introduction of these types of products coincides with peaks in price. The futures on Bitcoin became official at the end of 2017, and the ETFs (based on the same futures) came out in October of 2021. Both times it was about the top of the market. Could that mean that with the introduction of a BTC short ETF, we have bottomed out?

LEAVE A REPLY

Please enter your comment!
Please enter your name here