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ProShares Sets Sights on Bitcoin ETFs with Indirect Exposure Amidst Growing Market Demand

ProShares, a prominent issuer of exchange-traded funds (ETFs) in the United States, is gearing up to introduce a range of Bitcoin ETFs, offering indirect exposure to Bitcoin as the era of spot Bitcoin ETF trading takes off on domestic stock exchanges.

In a filing submitted to the U.S. Securities and Exchange Commission (SEC) on January 16, ProShares outlined its plans to launch leveraged and inverse Bitcoin ETFs.

These ETFs aim to generate daily returns based on the fluctuations in Bitcoin’s price, which are determined by the daily performance of the Bloomberg Galaxy Bitcoin Index (BGCI).

ProShares has put forth proposals for five distinct Bitcoin ETFs, including the Plus Bitcoin ETF, Ultra Bitcoin ETF, UltraShort Bitcoin ETF, Short Bitcoin ETF, and ShortPlus Bitcoin ETF.

The Plus Bitcoin ETF and Ultra Bitcoin ETF from ProShares aspire to mirror a 1.5x and 2x increase, respectively, in daily BGCI performance.

Conversely, the other three funds, namely ProShares UltraShort Bitcoin ETF, ProShares Short Bitcoin ETF, and ProShares ShortPlus Bitcoin ETF, are designed to reflect daily returns inversely correlated to the BGCI at -2x, -1x, and -1.5x, respectively.

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It’s important to note that these funds do not engage in direct shorting of Bitcoin; instead, ProShares aims to capitalize on price declines in Bitcoin.

At the time of filing, Bitcoin was trading at approximately $43,000, following a notable downturn subsequent to the introduction of spot Bitcoin ETFs in the United States.

Market analysts, such as ARK Invest CEO Cathie Wood, had previously anticipated a short-term sell-off as some investors looked to capitalize on the positive developments.

This announcement comes shortly after the U.S. SEC’s approval of the first batch of 10 spot Bitcoin ETFs on January 10, with trading commencing on January 11. ProShares did not participate in the initial launch of spot Bitcoin ETFs.

Previously, ProShares had been primarily focused on futures-based crypto ETFs, notably introducing one of the first Bitcoin futures-linked ETFs in the U.S. back in October 2021.

Their flagship BTC futures-based product, the Bitcoin Strategy ETF (BITO), has experienced substantial growth over recent months, briefly surpassing $2 billion in assets under management (AUM) for the first time in January 2024.

In addition to BITO, ProShares currently offers a range of ETFs related to cryptocurrency, including the Ether Strategy ETF, Bitcoin & Ether Market Cap Weight Strategy ETF, and the Bitcoin & Ether Equal Weight Strategy ETF.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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