ProShares Bitcoin Short ETF Grows Over 300% In One Week

The ProShares’ Bitcoin Short ETF (BITI) has become the U.S second largest Bitcoin ETF, growing by 306% last week.

BITI now holds net short exposure equivalent to 3,811 BTC, up from just 937 BTC on June 27.

The fund launched on June 21 and became the country’s second-largest Bitcoin ETF within just two days.

trailing another ProShares investment vehicle, the Bitcoin Strategy

So far, the only Bitcoin ETF products approved in the U.S. are futures-based. That means they’re backed by futures contracts—cash-settled bets on what Bitcoin’s price will be at a later date—rather than current prices.

BITO was the first such product to launch in the country, making it highly popular with investors. BITI, however, is structured differently: Its performance is inversely correlated to the S&P CME Bitcoin Futures Index. In other words, investors profit when the price of Bitcoin drops.

Given that BITI is barely more than 10% of BITO’s size, that could mean ETF investors still prefer long exposure to BTC. Furthermore, Arcane explained last week that long-term exposure to BITI is actually inefficient.

Should be stated that long-term short exposure through BITI is inefficient.

A spot-based Bitcoin ETF product, backed by real Bitcoin, has continually been rejected by the Securities and Exchange Commission.

The regulator is now being sued by Grayscale for its unwillingness to apply equal treatment to spot- and futures-based funds, both of which have been approved in several other countries.