The launch of ProShares first U.S. Short Bitcoin-linked ETF begs the question — does this mark another inflection point for BTC?
This year has brought a lot of pain for Bitcoin HODLers and short-term traders alike as the broader crypto market has lost its value by over 50% in 2022, shedding over $2 trillion in market capitalization. The bear market in cryptos has, unfortunately, coincided with unfavorable macroeconomic conditions — magnifying the downturn in digital assets. Most analysts, however still believe that hat the sector will rally in the future as the current environment is part of the maturity process.
As Bitcoin and the associated cryptos get integrated with the mainstream financial system, the options to trade BTC have increased significantly as well. Traders and Investors don’t have to feel left out from the action when the crypto market turns the other way. Similar to the stock and forex markets, you can now short BTC, adding more options for traders/investors. Investment product provider ProShares has launched the U.S.’s first exchange-traded fund (ETF) with which you can bet against the price of bitcoin (BTC).
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. BITI is designed to deliver the inverse (opposite) of the performance of the S&P CME Bitcoin Futures Index. This follows up on ProShares Bitcoin Strategy ETF (BITO), which offered exposures to the BTC futures contracts. A short bitcoin ETF is also already listed on the Toronto Stock Exchange by Horizons ETFs.
This is a significant addition to the trading options, considering the kind of price drop we have seen in Bitcoin this year — Bitcoin’s price dropped below $20,000 for the first time since Dec. 20 on June 18, falling as low as $17,800 the following day. When the Chicago Mercantile Exchange (CME) first launched futures trading, it marked the top in 2017. Then, the initial public offering (IPO) of Coinbase & the launch of the first Bitcoin futures ETF accurately signaled Bitcoin’s tops in April and November of 2021, respectively.
Most of these launches were markets by significant turning points for Bitcoin price movement, as you can see in the chart above. The bigger question now is whether the launch of the first short-Bitcoin ETF will mark a similar inflection point?
Originally Published on Medium
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