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ProShares to Launch New Bitcoin ETFs with Leveraged and Inverse Options

ProShares, a prominent U.S.-based exchange-traded funds (ETFs) issuer, is poised to diversify the Bitcoin ETF market with several innovative offerings. Amid the nascent days of spot Bitcoin ETF trading on American stock exchanges, ProShares plans to introduce ETFs that provide indirect exposure to Bitcoin’s price movements.

On January 16, ProShares filed with the U.S. Securities and Exchange Commission (SEC) to launch a suite of leveraged and inverse Bitcoin ETFs. These ETFs are designed to offer daily investment results based on the fluctuations in Bitcoin’s price, tracking the Bloomberg Galaxy Bitcoin Index (BGCI).

The proposed ETFs include the Plus Bitcoin ETF, Ultra Bitcoin ETF, UltraShort Bitcoin ETF, Short Bitcoin ETF, and ShortPlus Bitcoin ETF. The Plus and Ultra Bitcoin ETFs are set to target daily investment outcomes corresponding to 1.5 times and twice the daily performance of the BGCI, respectively. Conversely, the UltraShort, Short, and ShortPlus Bitcoin ETFs aim for daily investment results that mirror the inverse of the BGCI’s daily performance, at -2 times, -1 time, and -1.5 times, respectively. Notably, these funds do not directly short Bitcoin. Instead, they are structured to capitalize on declines in Bitcoin’s price.

This move comes as Bitcoin’s value hovers around $43,000, marked by a notable drop following the launch of spot Bitcoin ETFs in the U.S. High-profile industry figures, such as ARK Invest CEO Cathie Wood, have suggested that the market might experience a short-term sell-off as some investors opt to liquidate their holdings amidst positive developments.

The announcement of these new ETFs by ProShares follows closely on the heels of the U.S. SEC’s approval of the first 10 spot Bitcoin ETFs on January 10, with trading commencing the next day. Although ProShares was not among the issuers of these initial spot Bitcoin ETFs, the firm has shown a keen interest in futures-based crypto ETFs. In October 2021, ProShares launched one of the first U.S. Bitcoin futures-linked ETFs. Their flagship product, the Bitcoin Strategy ETF (BITO), has witnessed substantial growth, briefly surpassing $2 billion in assets under management (AUM) in January 2024.

ProShares’ current portfolio extends beyond BITO, encompassing the Ether Strategy ETF, the Bitcoin & Ether Market Cap Weight Strategy ETF, and the Bitcoin & Ether Equal Weight Strategy ETF, showcasing its commitment to broadening its cryptocurrency-related offerings.

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