ProShares Receives Approval for First Ever Short Bitcoin ETF

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ProShares, known to most retail investors for their TradFi ETFs, is now introducing a Bitcoin Short ETF. This comes at a time when Bitcoin has fallen 55% YTD and 30% in the last month, at the time of this writing. The ETF is available through traditional brokerages.

This is another way for retail to gain exposure to Bitcoin through a traditional finance account, without allowing for spot purchasing or exposure. The types of Bitcoin exposure for U.S. retail investors using traditional brokerages include a short ETF, futures ETF, and GBTC (a closed-ended fund trading at a 30% discount). There are still no developments toward offering a spot Bitcoin ETF.

While SEC Chair Gary Gensler is very familiar with Bitcoin through his courses at MIT, he has not confirmed any developments for a spot Bitcoin ETF approval. 

  • ProShares is an ETF behemoth that has received approval to release a short Bitcoin ETF. While Bitcoin is a volatile asset and has experienced -80% drops during previous cycles, the release of a short Bitcoin ETF after dropping 55% on the year will allow institutions, mainly ProShares, to profit from volatility in both directions.
  • While the Short ETF is another financial product for retail to gain Bitcoin exposure, retail still does not have access to Bitcoin spot exposure through traditional brokerages. 
  • Retail investors have the option to avoid management fees and discounts to Bitcoin’s market price through exchanges.

ProShares, a Mainstay in the ETF world, Gets Permission to Release Short Bitcoin ETF

The ETF’s prospectus states that “The Fund does not invest directly in Bitcoin nor does it directly short Bitcoin. Instead, the Fund seeks to benefit from decreases in the price of Bitcoin futures contracts for a single day.” The fund will be using cash settled futures contracts and not have any direct exposure to the asset in a similar fashion to other available Bitcoin futures ETFs.

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