ProShares, an issuer of
exchange-traded funds (ETFs), says it will launch the first US short
Bitcoin-linked ETF (BITI) on Tuesday.
The planned unveiling of
BITI comes eight months after the ETF provider launched the first US
Bitcoin-linked ETF in October 2021.
ProShares similarly
launched the first Bitcoin-linked mutual fund (BTCFX) in July last year.
The ETF provider
explained that BITI was designed to address the high cost that comes with short
exposure to Bitcoin.
“The ProShares Short
Bitcoin Strategy ETF (NYSE Ticker: BITI) provides a way for investors to
potentially profit from a decline in the price of Bitcoin or hedge their
cryptocurrency exposure with the convenience of an ETF,” it explained in a
statement.
The issuer, however,
noted that investors who prefer to invest in mutual funds can opt for the Short
Bitcoin Strategy ProFund (BITIX).
ProShares disclosed that BITIX will also be launched tomorrow by ProFunds,
its mutual fund affiliate.
The ETF provider along
with its affiliates manage $55 billion in assets.
“The BITIX mutual fund
will have the same investment objective as BITI,” ProShares said.
BITI: To What End?
ProShares explained
that BITI seeks to achieve the opposite of the performance of the S&P
CME Bitcoin Futures Index.
In turn, the S&P CME
Bitcoin Futures Index measures the performance of the CME Bitcoin Futures
market.
BITI also seeks to gain
exposure through Bitcoin futures contracts, the company said.
Explaining the purpose of BITI,
Michael L. Sapir, the CEO of ProShares, pointed out that recent times
have shown that Bitcoin can drop in value.
Sapir explained that
BITI gives investors who believe that the price of Bitcoin will drop the
opportunity to profit or hedge their cryptocurrency holdings.
He further explained that the ETF enables investors to conveniently obtain short exposure to bitcoin by
buying an ETF in a traditional brokerage account.
“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,” Sapir
explained in the statement.
The ETF does not invest
directly in or hold bitcoin, ProShares said.
ProShares, an issuer of
exchange-traded funds…
