ProShares Plans ETF, Mutual Fund Betting Against Bitcoin

The fund group’s latest planned offerings would seek inverse returns to the CME Bitcoin Futures Contracts Index

article-image

Blockworks exclusive art by axel rangel

share

key takeaways

  • The ProShares Bitcoin Strategy ETF (BITO), which launched in October, has $1.3 billion in assets
  • The SEC asked ETF issuer Direxion to withdraw its application for its proposed Bitcoin Strategy Bear ETF last year

ProShares has revealed plans to bring to market an ETF that would offer investors the ability to bet against bitcoin following the launches of bitcoin futures and metaverse ETFs in recent months.

The ProShares Short Bitcoin Strategy ETF would seek investment results corresponding to the inverse — -1x — of the return of the CME Bitcoin Futures Contracts Index for a single day, according to a Tuesday disclosure.

While the fund plans to invest primarily in bitcoin futures contracts, it may invest in money-market instruments, such as US Treasury bills and repurchase agreements.

ProShares is also seeking to launch a mutual fund with the same name and investment strategies, a separate disclosure indicates. The filings do not indicate tickers or expense ratios for the proposed products.

A ProShares spokesperson declined to comment beyond the filings.

The firm in October launched its Bitcoin Strategy ETF (BITO), which was the country’s first ETF to invest primarily in bitcoin futures contracts. Priced at 95 basis points, BITO has slowly grown to $1.3 billion in assets after an initial jump to about $1 billion during its first day of trading.

Shortly after BITO’s launch, ETF issuer Direxion filed to launch a Bitcoin Strategy Bear ETF to offer managed short exposure to CME bitcoin futures contracts. The Securities and Exchange Commission requested for the filing to be withdrawn.

Nate Geraci, president of The ETF Store, told Blockworks he sees no reason why the SEC shouldn’t approve ProShares’ proposed fund, adding that he expects plenty of demand for the product.

“With the SEC having already blessed ETFs holding CME-traded bitcoin futures, why shouldn’t ETFs exist that short those same futures?” he said. “The current long-only bitcoin futures ETFs have also worked exactly as intended, which is likely to offer some additional comfortability to the SEC.”

Switzerland-based 21Shares launched its Short Bitcoin ETP (SBTC) in January 2020. Horizons ETFs Management, headquartered in Canada, launched the BetaPro Inverse Bitcoin ETF (BITI) on the Toronto Stock Exchange in April 2021.

ProShares has 142 ETFs trading in the US with combined assets under management of roughly $70 billion, according to ETF.com data.

In addition to BITO, the company launched a Metaverse ETF last month. The ETF tracks an index comprising 40 companies, including device makers and data processors, as well as social media and gaming platforms.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

ao cover.jpg

Research

Arweave recently launched the testnet for AO computer, a new messaging protocol that will sit atop a PoS network and aims to become a scalable global compute platform through parallel processing and modularity.

article-image

The “fastest-growing ETF in history” has seen net inflows on every trading day since its Jan. 11 launch

article-image

Relm and Chainproof will provide insurance quotes to distributed validators

article-image

DLC.Link uses a Taproot-based Bitcoin multisig to let institutions mint dlcBTC, starting on Arbitrum

article-image

Pre-seed Bitcoin startup deals rose 360% in 2023, a TVP report shows

article-image

Circle’s new smart contract to allow holders of BlackRock USD Institutional Digital Liquidity Fund to redeem shares for its stablecoin

article-image

Uniswap says it was not surprised to receive a Wells notice given the SEC’s “abusive” use of power as of late