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Spot ETFs Move Over! ProShares Files for Leveraged Bitcoin ETFs

Spot ETFs Move Over! ProShares Files for Leveraged Bitcoin ETFs

The Securities and Exchange Commission (SEC) filing of asset manager ProShares’ most recent Bitcoin ETF indicates that the company is trying to obtain a competitive edge in the market. This is in response to the recently introduced Spot BTC ETFs, which have drawn many investors from its BTC futures ETF.

ProShares Files For Five Leveraged And Inverse Bitcoin ETFs

As per the filing, these inverse and leveraged exchange-traded funds (ETFs) will follow the Bloomberg Galaxy Bitcoin Index’s daily performance. Of the five ETFs, ProShares UltraShort Bitcoin ETF, ProShares ShortPlus Bitcoin ETF, and ProShares Short BTC ETF are the inverse. As stated in the filing, these funds will only seek to profit from drops in the price of Bitcoin rather than actively shorting it.

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ProShares Plus Bitcoin ETF and ProShares Ultra Bitcoin ETF are the names of the leveraged exchange-traded funds, respectively. These funds, like the inverse ETFs, will only seek to profit from notable price fluctuations in Bitcoin rather than making direct investments in the cryptocurrency. ProShares is a significant provider of exchange-traded funds (ETFs) related to cryptocurrencies.

The company was the first to introduce the ProShares Bitcoin Strategy (BITO), an ETF for Bitcoin futures. They also introduced the first exchange-traded fund (ETF) to track Ethereum’s performance. Additionally, this will not be the asset manager’s first attempt to offer an inverse ETF; they currently have investment funds designed to profit from drops in the prices of cryptocurrencies like Bitcoin and Ethereum.

 

Bitcoin price chart from Tradingview.com (ProShares ETF)

BTC price at $42,500 | Source BTCUSD on Tradingview.com

A Reasonable Justification for ProShares’ Recent Action

Nate Geraci, president of the ETF Store, speculated that ProShares might have been motivated to make their recent move due to BITO’s potential exhaustion. Consequently, ProShares are focusing on inverse and leveraged ETFs, which Geraci believes are their primary income source.

Indeed, according to a recent comment by Bloomberg analyst Eric Balchunas, the ProShares Futures Bitcoin ETF may already be bleeding. He stressed BITO’s record-breaking $2 billion volume on the day Spot Bitcoin ETFs debuted. Geraci speculated investors shifted funds to Spot BTC ETFs due to redemptions.

A K33 report from the previous year suggests that the introduction of Spot BTC ETFs diminishes the appeal of futures Bitcoin ETFs. Geraci expresses similar sentiments, stating that the existence of the “real thing” renders Bitcoin futures unnecessary. He reveals that VanEck is discontinuing its Bitcoin futures exchange-traded fund.

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