In the United States, a new financial product is being born. Its ambition is to achieve the inverse return of the most important cryptocurrency.
Tracker provider ProShares is applying to the U.S. Securities and Exchange Commission (SEC) for approval to launch the ProShares Short Bitcoin Strategy ETF, according to a document filed with the US Financial Markets Constable. The objective is to achieve the inverse return of a bitcoin futures index, on a daily basis. For example, if bitcoin futures fall 3%, the tracker should rise 3% and vice versa.
“BITO has proven itself, everything went perfectly, so there’s no reason for the SEC to stop the next step in this process.”
This isn’t the first time a tracker vendor has attempted to launch such a product. A smaller rival, Directionalso tried in October, but the project was rejected by the SEC.
The chances of success for ProShares are highaccording to experts. The group managed to launch the very first ETF american bitcoin futures in octoberwith the BITO ticker. This changed hands 24 million times on its first day of trading, which is the second best start for a tracker. Today, BITO has $1.26 billion under management.
“BITO has proven itself, everything went perfectly. So there is no reason for the SEC to stop the next step in this process,” said Eric Balchunas, analyst at Bloomberg Intelligence.
Coincidence or not, bitcoin
has been drinking the cup for several sessions. On Wednesday, the price of the most famous cryptocurrency fell below $44,000, its lowest level since March 24. The decrease is more likely related to heightened risk aversion in financial marketsa Fed official who warned against tightening monetary policy.
Similarly, when panic erupted in the markets due to the war in Ukraine in early March, bitcoin fell along with the stock markets. At the time, the digital currency did not live up to its status as virtual goldunlike real gold.
The anti-bitcoin tracker will be listed on the NYSE, but its ticker is not yet known. Investors use inverse ETFs to react to certain short-term movements. They are not a long term investment. As a reminder, Belgian investors cannot buy American trackers.