ProShares launched an ETF that tracks Bitcoin's daily performance doubling and reverse performance, demonstrating growing demand for leveraged and short Bitcoin exposure tools. Despite the risk of volatility, these funds meet investors' needs for greater returns or hedging exposure.
FX168 Financial News (North America) News The frenzy surrounding the launch of Bitcoin spot exchange-traded funds (ETFs) has yet to subside, as Wall Street's newest entrants have offered enhanced versions of such products.
According to a press release, ProShares launched on Tuesday (4/2)$PROSHARES TRUST ULTRA BITCOIN ETF (BITU.US)$The ETF tracks Bitcoin's daily performance twice as much through the Bloomberg Bitcoin Index, and$PROSHARES TRUST ULTRASHORT BITCOIN ETF (SBIT.US)$It then tracks Bitcoin's reverse performance. Each bank's fee rate is 95 basis points.
In January of this year, nearly 12 Bitcoin ETFs directly invested in Bitcoin were successfully listed, attracting a net inflow of 12 billion US dollars and nearly 60 billion US dollars in assets. What's remarkable about these two new ETFs, ProShares, is that they provide amplified returns on the Bitcoin spot market rather than the futures market.
The large inflow of capital highlights the seemingly never-ending demand for spot Bitcoin ETFs, as well as the growing popularity of ETFs as a frictionless trading tool. such as the newly converted$Hashdex Bitcoin Futures ETF (DEFI.US)$Also, if approved, more ETFs such as Grayscale Bitcoin Mini Trust (Grayscale Bitcoin Mini Trust) will be launched soon.
Michael O'Riordan, founding partner of ETF consulting firm Blackwater, said: “This shows that ETF managers may be a group of speculators trying to capitalize on the positive sentiment of the market as much as possible.”
After regulators approved the launch of an in-stock Bitcoin ETF, new products flooded into the market, opening the door for investors to invest. This type of fund highlights the growing demand for cryptocurrency exposure from a variety of investors seeking to direct new investments in whatever direction they think Bitcoin will take next.
Matt Maley, chief market strategist at Miller Tabak+ Co, believes that although the launch of leveraged ETFs is only a “matter of time,” they may be a double-edged sword.
“On the negative side, this could lead to increased speculation on an already volatile asset class. However, they will also help investors hedge their positions. So, that may offset some of the speculation. Overall, it should continue to attract more investors into this asset class.”
Bitcoin's price fluctuations explain the growing demand for investment instruments that provide Bitcoin leverage and short exposure. Although Bitcoin has fallen by about 10% since peaking in mid-March, it is still up 54% since the beginning of this year. This year marks Bitcoin's comeback from the dark days of 2022, when a number of well-known companies went out of business and Bitcoin fell 64%, the second-worst annual performance on record.
2x Bitcoin Strategy ETF for a $1.5 billion volatile stock company$2x Bitcoin Strategy ETF (BITX.US)$Take for example. The fund's daily revenue is double the S&P CME Bitcoin Futures Daily Roll Index (S&P CME Bitcoin Futures Daily Roll Index). Since its launch in June, it has attracted capital inflows every month, raising 885 million US dollars last month alone.
For Michael Sapir, CEO of ProShares, his leveraged BITU fund provides investors with an opportunity to “amplify Bitcoin returns or target less risky capital.” On the other hand, the ultra-short fund SBIT “allows investors to seek profit or hedge their exposure to Bitcoin when the price of Bitcoin falls.”
Editor/Somer