ProShares is releasing a Bitcoin ETF that will short the price of BTC, but some surprising data shows shorters might be about to get rekt.
- Bitcoin Short ETF Announced
- Shorters Exiting Position
Bitcoin Short ETF Announced
ProShares launched their ProShares Short Bitcoin Strategy ETF (Ticker: BITI) today. It’s the first Bitcoin-related securities product that allows traders to bet against the world’s most popular cryptocurrency.
“As recent times have shown, bitcoin can drop in value,” said Michael Sapir, CEO of ProShares. “BITI affords investors who believe that the price of bitcoin will drop with an opportunity to potentially profit or to hedge their cryptocurrency holdings.”
The ETF will not be a physically-backed ETF and will essentially be the inverse of the ProShares Futures ETF.
The ProShares Short Bitcoin Strategy ETF comes at a time when Bitcoin is struggling mightily. It’s currently trading in the $20,500 USD range, after hitting a low of $17,750 last week. All in all, Bitcoin is trading at levels it hasn’t seen since 2020.
Macro elements like tapering and world instability is largely to blame for Bitcoin’s downfall. With the macro not looking to improve any time soon, the ETF couldn’t have come at a better time. Or did it?
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Shorters Exiting Position
Interestingly enough, it appears there’s an exodus from short positions. Crypto asset manager CoinShares reported that it saw a net outflow from its short funds this week of over $5 million. The manager has a total of 65 million of AUM.
That 5 million number might seem small but it’s actually a record outflow from short positions. Such an amount suggests sentiment might be turning, this despite the macro not necessarily improving.
Considering inflation numbers are pointing to a likely recession, why are shorters exiting? Is it possible that the bad macro is priced in? That seems a little too optimistic because even if psychologically people are ready to get back in the current belt-tightening suggests there will be less money to throw around. Surprisingly, Bitcoin long positions grew by 28 million USD during the same timeframe.
It’s interesting to see that as ProShares introduces a short ETF just as an exodus from that position is occuring. While some on Twitter were upset by this — and saw it as a sign of impending doom — it’s likely to bring a much-needed counterbalance to the BTF Futures market. We could already be seeing that in the net outflows.
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