ProShares, a prominent U.S. exchange-traded funds (ETFs) provider, is preparing to launch multiple Bitcoin ETFs with indirect BTC exposure. This move coincides with the first day of trading for spot Bitcoin ETFs on local exchanges. As per a filing with the U.S. Securities and Exchange Commission (SEC) on January 16, ProShares plans to introduce both leveraged and inverse Bitcoin ETFs. These ETFs aim to produce daily investment results that reflect the changes in Bitcoin prices, based on the performance of the Bloomberg Galaxy Bitcoin Index (BGCI).
In its prospectus, ProShares outlines plans for five new Bitcoin ETFs: 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 are designed to achieve daily results that are 1.5 times and twice the daily performance of the BGCI, respectively.
The other three - ProShares UltraShort Bitcoin ETF, Short Bitcoin ETF, and ShortPlus Bitcoin ETF - are structured to deliver daily results that are the inverse of the BGCI's performance (-2x, -1x, and -1.5x, respectively). ProShares clarifies in its filing that these funds do not directly short Bitcoin but aim to benefit from declines in its price.
At the time of the filing, Bitcoin's price had fallen to around $43,000, following the launch of a spot Bitcoin ETF in the U.S. Market analysts, including ARK Invest's CEO Cathie Wood, had anticipated a possible short-term sell-off as some investors might liquidate holdings to capitalize on the news. The U.S. SEC had approved the first 10 spot Bitcoin ETFs on January 10, with trading commencing on January 11. Notably, ProShares was not among the issuers of these initial spot Bitcoin ETFs.
Previously focusing on futures-based crypto ETFs, ProShares launched one of the first U.S.-based ETFs tied to Bitcoin futures in October 2021. Its Bitcoin Strategy ETF (BITO), based on BTC futures, has experienced substantial growth, with its assets under management (AUM) hitting $2 billion for the first time in January 2024. Alongside BITO, ProShares also offers the Ethereum Strategy ETF (EETH), the Bitcoin and Ethereum Cap-Weighted Strategy ETF (BETH), and the Bitcoin and Ether Equal-Weight Strategy ETF (BETE).
