Stake Academy Wall St: Investing Against Bitcoin
Last year saw the launch of ETFs that traded on the future price of Bitcoin, and now there will be a way to trade against it. The ProShares Short Bitcoin Strategy ($BITI) is now live and trading on Stake. With that, let’s take a closer look at how issuers like ProShares will structure such an offering.
ProShares has a history of being first to market. In October last year, it was the first firm to list a bitcoin futures ETF. On its launch, $BITO became the second most traded ETF in market history as it reached US$1b in market inflows. This launch was soon followed by Bitcoin hitting an all-time high of around US$68,900 in the subsequent weeks.
However with Bitcoin currently trading around US$20,000, investors will be hoping the listing of $BITI does not have a similar effect on the world’s largest crypto in reverse.
Options For Investors
The options for investors who want to trade in crypto have been limited. For investors looking to short crypto, this ETF is the first of its kind in the U.S. But Horizons ETFs up in Canada, has been offering a short Bitcoin ETF that is listed on the Toronto Stock Exchange (TSX) since April. BITI’s entry into the U.S. market means that the SEC has approved a Bitcoin short ETF before even approving a Bitcoin spot ETF.
The current ETFs on the market allows investors to bet on the future of BTC via futures or against it through shorts, but don’t let traders simply invest in it.
Reasons For Launch
The launch of BITI comes as BTC trends down 70% from its all-time high.
ProShares CEO Michael Sapir told markets that recent times showed that Bitcoin can drop in value, and the ETF gives investors an opportunity to profit off that drop.