ProShares To Debut First US ETF Betting on Bitcoin Plunge

ProShares, an issuer of exchange-traded funds, including inverse exchange-traded funds, and similar products, announced on Monday that it plans to launch the first short Bitcoin exchange-traded fund (ETF) this week.

The ProShares Short Bitcoin Strategy will trade on the New York Stock Exchange under the ticker BITI, ProShares said. BITI will be the first ETF of its nature in the U.S.

The short Bitcoin-linked ETF aims to give investors the opportunity to profit from a decline in Bitcoin’s price, or to hedge their exposure to cryptocurrency. It will have an expense ratio of 0.95%.

ProShares said BITI is designed to deliver the opposite of the performance of the S&P CME Bitcoin Futures Index and that it seeks to get exposure through Bitcoin futures contracts.

In a statement, ProShares CEO Michael Sapir, said: “As recent times have shown, Bitcoin can drop in value. BITI affords investors who believe that the price of bitcoin will drop with an opportunity to potentially profit or to hedge their cryptocurrency holdings. BITI enables investors to conveniently obtain short exposure to bitcoin through buying an ETF in a traditional brokerage account.”

Investors Wary as Market Sell-Off Continues

While US regulators hold off approving any ETFs that directly track cryptocurrency, ProShares is launching a fund (ticker BITI) that will allow investors to take short positions on Bitcoin futures. In October last year, ProShares established the first U.S. Bitcoin futures ETF.

The latest launch comes as applications for a physical Bitcoin ETF pile up in the U.S., with at least fifteen firms throwing their hat in the ring, including Galaxy Digital Holdings Ltd, Fidelity Investments Inc., and others. Since 2013, the US SEC has rejected every spot Bitcoin ETF application, citing concerns about criminal activity and market manipulation.

The launch is well-timed when the market uncertainty remains high as investors await to hear the next moves by the Federal Reserve with regard to interest rate increases aimed to tame rising inflation. Many investors are still speculating the crypto market to remain bottom due to aggressive actions by the Central Bank.

As the crypto plunge continues, Bitcoin currently trades at the $20,000 level while Ether holds above $1,000, with other major coins such as Solana, Cardano, and Dogecoin all in the red. A spate of cryptocurrency meltdowns has erased tens of billions of dollars of investors’ assets.

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Simplify Asset Management Files Application of the “MAXI” Bitcoin ETF

According to filings with the U.S. Securities and Exchange Commission (SEC), on April 20, a Registered Investment Adviser Simplify Asset Management filed with the SEC for its Simplify Bitcoin Strategy Risk-Managed Income ETF under the ticker symbol “MAXI”. - 2022-04-21T161752.129.jpg

Currently, 22 ETFs are trading on U.S. markets. Simplify Asset Management Inc. ETFs have total assets under management of $1.40B.

The MAXI fund, which charges a management fee of 0.85%, does not hold cryptocurrencies themselves but the futures prices of cryptocurrencies.

The potential Bitcoin ETF aims at earning income through three strategies: Bitcoin futures strategy, income strategy, and option stacking strategy. For example, by selling call options and buying put options on Bitcoin futures or related ETFs to earn spread income to meet the first and third strategies through the integration.

The fund will focus on short-term U.S. Treasuries in its income strategy and ETFs on U.S. Treasuries.

The US SEC has approved America’s third functional Bitcoin Exchange Traded Fund (ETF) product that tracks the futures price of the world’s largest crypto asset.

The approval adds Teucrium to the list of other issuers, including ProShares and VanEck, both of whom received their go-ahead to list Bitcoin-futures-based ETFs last year.

More Bitcoin ETF products is expected to trade in the market. As reported by Blockchain.News on Wednesday, Australia’s first bitcoin ETF will be listed on the Chicago Board Options Exchange (CBOE) stock exchange next week on Apr 27.

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Australia’s First Bitcoin ETF to Launch on Apr 27

Australia’s first bitcoin ETF will be listed on the Chicago Board Options Exchange (CBOE) stock exchange next week on Apr 27, The Australian Financial Review reported on Tuesday. - 2022-04-20T130658.768.jpg

It is reported that ASX Clear, a powerful clearinghouse in the heart of Australia’s equity capital market, the clearinghouse said that three institutional-level clearing participants and one large retail clearing participant have met the 42% margin requirement for settlement risks.

They will share the strict margin requirements required for settlement risks associated with Bitcoin.

So ASX Clear, the clearinghouse that controls access to the country’s equity capital markets, will give the green light to the country’s first bitcoin ETF.

Per the Blockworks, The bitcoin ETF product will begin trading as early as April 27 on Cboe Australia, following a seven-day notice period to investors, clearing participants, brokers and market makers, beginning Wednesday, after paying the 42% margin required by ASX Clear.

Bitcoin Exchange Traded Fund (ETF) is a type of security that tracks the overall price of Bitcoin and enables investors to trade and purchase shares of it on traditional exchanges, circumventing crypto trading platforms.

Allegedly, nearly $1 billion may flow into the product on launch day.

Cosmos asset management firm also launched its crypto-backed ETF (Cosmos Global Digital Miners Access ETF), which is also scheduled to begin trading on ASX’s biggest rival Chi-X stock exchange.

A few days ago, Fidelity Investments Inc., a multinational financial services corporation based in Boston, announced the launch of two new thematic exchange-traded funds (ETFs) – Fidelity Crypto Industry and Digital Payments ETF (FDIG) and Fidelity Metaverse ETF ( FMET).

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SEC to Give “Careful Consideration” to Concern about Spot BTC ETFs: Gensler

In a letter sent to members of Congress, Gary Gensler, Chairman of the United States Securities and Exchange Commission (SEC), promised to give “careful consideration” about spot Bitcoin Exchange Traded Products (ETPs). 


Recalled that two Congressmen, Tom Emmer (MN-06) and Darren Soto (FL-09), sent a letter to Gensler back in November last year requesting to know the reason for the commission’s caution towards a spot BTC ETF product when indeed, it has approved a related product based on the futures price of the premier cryptocurrency. 

“We question why, if you are comfortable allowing trading in an ETF based on derivatives contracts, you are not equally or more comfortable allowing trading to commence in ETFs based on spot Bitcoin,” the letter read at the time following the approval of ProShares futures-based Bitcoin ETF product. “Bitcoin spot ETFs are based directly on the asset, which inherently provides more protection for investors.”

In response to the inquisition, Gensler said the proposals for both a futures-based and a spot ETF are considered separately based on the provisions of the Exchange Act. While Gensler said, the commission would continue to probe whether the proposals for a spot Bitcoin ETF product are capable of preventing fraud and manipulative practices.

The fears of the SEC are compartmentalised mainly to the U.S., and other countries, including Canada, Brazil, and Germany, have fully functional spot Bitcoin ETF products trading on their public bourses. In a bid to prevent the United States from lagging behind in emerging financial innovations, Rep Emmer tweeted saying;

“This issue remains a priority for us and we will continue to oversee the SEC in its mission to maintain fair and orderly markets and facilitate capital formation.”

While the SEC Chairman reassured that the commission would continue to consider new proposals to list a spot BTC ETF, the ecosystem is hardly optimistic about the chances of anyone emerging soon.

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Valkyrie Bitcoin Miners ETF (WGMI) Approved for Trading on NASDAQ

Valkyrie’s Bitcoin Miners exchange-traded fund (ETF) has been approved for listing on the U.S. stock exchange Nasdaq Stock Market under the ticker symbol “WGMI.”

  • According to a U.S. Securities and Exchange Commission (SEC) filing on Monday (February 7, 2022), Nasdaq gave approval for the Bitcoin Miners ETF from crypto asset manager Valkyrie to be listed and traded on the exchange.
  • The latest development comes less than a month after Valkyrie filed an application with the SEC to list the fund. The company’s filing noted that the Bitcoin Miners ETF would invest at least 80% of its net assets in companies that “derive at least 50% of their revenue or profits from bitcoin mining operations and/or from providing specialized chips, hardware, and software or other services to companies engaged in bitcoin mining.”
  • Also, Valkyrie noted that it would focus on crypto mining firms that use green and renewable energy for their mining activities. The company’s Bitcoin Miners ETF is scheduled to begin trading on Nasdaq on Tuesday, February 8, 2022.
  • While Valkyrie is set for the debut trading of its Bitcoin Miners ETF, it is not the first fund from the company to be approved.
  • Back in October, the crypto firm’s Bitcoin futures ETF became the second such product in the United States after ProShares’ to receive the green light from the SEC. Valkyrie’s Bitcoin Futures ETF was also listed on Nasdaq.
  • Meanwhile, the SEC continues to be reluctant to approve a spot Bitcoin ETF. In January, the securities watchdog turned down a proposal from SkyBridge, stating that the company did not meet the requirements.
  • Other applicants who have met the same fate include Valkyrie and Kryptoin. Recently, the SEC delayed its decision on Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.


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Canadian Bitcoin ETF sees its third-biggest daily inflow ever

Canada-based Purpose Bitcoin ETF attracted over $38 million worth of Bitcoin (BTC) this Tuesday, its third-largest daily inflow to date.

According to data provided by Glassnode, investors poured about 1,054 BTC into the fund, marginally lower than the inflows recorded on Dec. 6 last year. However, the capital injection still came out to be almost half the amount that entered the Purpose Bitcoin ETF on its debut on Feb. 22, 2021 — over 2,250 BTC.

Purpose Bitcoin ETF flows. Source: Glassnode

Investors buying the dip?

Bitcoin ETFs mimic the cryptocurrency’s spot price performance, thus allowing investors to gain exposure in its market without holding the actual BTC directly. In simple terms, ETF-backers buy real Bitcoin with the money they attract from an investor, thus becoming a proxy method to measure markets’ interest in the cryptocurrency.

Typically, markets believe that strong inflows into funds drive up the underlying assets’ prices by attracting more return-chasing investors. As a result, the Bitcoin price should move in the same direction as the fund flows — to the upside — in a perfect world.

The higher inflows surfaced despite Bitcoin’s recent price correction, wherein BTC price has been trading around $37,000 on Feb. 3, almost three months after hitting a record high of $69,000. 

BTC/USD daily price chart. Source: TradingView

But in the same period, the total amount of BTC held in the Purpose Bitcoin ETF reserves has climbed from nearly 24,100 to a little over 31,000. That suggests that Purpose ETF investors have been buying the Bitcoin dip.

But the story appears different when one takes all the Bitcoin funds into consideration.

Cautious accumulation in play

According to a report published on Jan. 31 by CoinShares, the Bitcoin funds experienced a weekly inflow of $22 million worth of BTC as of Jan. 28. Meanwhile, their collective year-to-date (YTD) readings showed about $132 million in BTC exiting the market.

In doing so, the total assets under management (AUM) at all the Bitcoin funds dropped to their July 2021 low of $29 billion in January before recovering to over $31 billion.

“We are seeing an increasing price sensitivity to monetary policy statements, with the recent FOMC meeting having an immediate intraday price response,” wrote CoinShares, noting that the funds encompassing all the digital assets saw inflows worth $19 million in the week ending Jan. 28. 

“While small, it continues to suggest investors are beginning to cautiously add to positions at these depressed price levels.”

Flow by digital assets. Source: Bloomberg, CoinShares

Eric Balchunas and Athanasios Psarofagis, senior ETF analysts at Bloomberg Intelligence, noted that Bitcoin ETF’s would continue to attract inflows in 2022 as investors wait for the U.S. Securities and Exchange Commission (SEC) to “approve a spot Bitcoin ETF.”

Spot Bitcoin recovery stalls

As Bitcoin ETFs indicate cautious accumulation, spot BTC has been threatening to continue its correction in the coming sessions.

Related: Willy Woo: ‘Peak fear,’ but on-chain metrics say it’s not a bear market

In detail, BTC/USD resumed its downside moves after failing to reclaim $40,000 on Feb. 1. The correction also appeared as the price tested a downward sloping trendline as resistance, serving as a descending channel’s upper trendline.

BTC/USD daily price chart featuring descending channel. Source: TradingView

That increased Bitcoin’s potential to extend its bearish momentum towards the channel’s lower trendline, sitting near $30,000, a strong support level.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.