A product that allows investors to make money when the price of bitcoin falls has been launched in the US.
Proshares claims the Short Bitcoin-Linked ETF or BITI for short, is a US first and 'offers investors the opportunity to profit when the daily price of bitcoin declines, with the convenience, cost-efficiency, and liquidity of an ETF'.
“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,” it said.
This is not Bethesda-based ProShares first Bitcoin ETF.
It launched BITO, the US's first long-only [buy] bitcoin-linked ETF, in October 2021 to a huge fanfare and investor attention.
BITO attracted more than US$1bn in just two days placing it among the most successful launches in the history of the ETF industry.
That was a high-water market, however, and since then BITO has shed around 70% of its value mirroring the slide in the value of Bitcoin recent weeks.
Proshares now though is giving investors an option literally to hedge their bets in future.
“As recent times have shown, bitcoin can drop in value,” said ProShares CEO Michael Sapir.
“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 is designed to deliver the inverse (opposite) of the performance of the S&P CME Bitcoin Futures Index solely on a day-to-day basis.
ProFunds, an affiliate of Proshares, launched the first bitcoin-linked mutual fund, BTCFX, in July 2021 and it will launch a matching short mutual fund tomorrow.
Short Bitcoin Strategy ProFund (BITIX) will have the same investment objective as BITI.
“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 added.