According to a press release, investment giant ProShares will launch a new trading exchange fund (ETF) tied to bitcoins in the United States. The company behind the first BTC ETF in the country under the ticker BITO will launch the short bitcoin strategy under the ticker BITI.
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The investment facility will be available on the New York Stock Exchange (NYSE) tomorrow, June 21, inverting the BTC price of the S&P Chicago Mercantile Exchange (CME) BTC futures index. In other words, investors benefit when the price of BTC moves lower.
With the number one cryptocurrency last trading below its all-time high of $20,000 and given the current macroeconomic environment, market participants are anticipating further losses. The new ProShares ETF gives these investors the opportunity to benefit from a bearish trend.
With that in mind, the press release states that BITI aims to address the “challenge of gaining brief exposure to Bitcoins.” The investment firm argues that this process can be “challenging and expensive for many investors” in the United States.
Investors in this country, in particular, could face obstacles when trying to short Bitcoin futures-related products. The regulatory environment in the US makes this more difficult than in the rest of the world, but ProShares is trying to offer a solution.
Short positions are often used by long-term holders of certain assets to hedge their long positions against future losses. For this reason, this new investment vehicle could offer investors a solution to protect their wealth. CEO Michael Sapir said:
BITI offers investors who believe that the price of Bitcoin will fall an opportunity for a potential profit or for hedging their cryptocurrency holdings. BITI allows investors to conveniently take short positions in Bitcoins by buying ETFs in a traditional brokerage account.
BTC is in a bearish trend, but there is some recovery on the 4-hour chart. Source: BTCUSD trade view
Bitcoin short circuit risk at ProShares
The new BTC short ETF is not physically settled and is not diversified. Investors are only exposed to the price of BTC in the futures market. As the company has made clear, there may be situations where BTC’s spot price and its future price will be different.
This could create some barriers for investors. Similarly, the ETF will attempt to hit a daily target of 1X for its BTC-based strategy. This could result in compound gains for investors, but also significant losses, ProShares warned.
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The investment company will also launch a short-term mutual fund BTC. This investment tool called Short Bitcoin Strategy ProFund will be launched tomorrow under the name BITIX. Sapir closed:
Following the addition of BITI and BITIX, ProShares and ProFunds will be the only fund families in the United States to offer funds that allow investors to express their opinion on Bitcoin’s performance – whether they believe the price will go up or down will fall.