green the red – The price of Bitcoin (BTC) remains in the vicinity of $20,000, and is struggling to begin a real bullish recovery. This situation could, however, enrich investors who would bet on a BTC ETF based on the dynamism of ours.
The price of Bitcoin is falling: good for this ETF
ProShares announced in a June 20 press release, the launch of a rather particular Bitcoin ETF, for June 21. This exchange-traded fund, called ProShares Short Bitcoin Strategy ETFis still tied to BTC futures, just like the first Bitcoin ETF launched by the company.
This fund, available on the New York Stock Exchange, under the ticker BITI, however allows investors to… bet against Bitcoin.
These investors can more specifically, take advantage of bitcoin price declines. Fund Technically, the performance of this to oppose to that of the S&P CME Bitcoin Futures index on a daily basis.
Investors could then benefit from further significant declines in the price of Bitcoin, especially those below the $20,000 floatline.
The launch of this fund is all the more interesting for the markets, given the bear market current. On paper, this ETF should therefore be successful, especially given the pessimistic outlook for Bitcoin.
The latter remain in effect for the moment bearish. At best, the price of Bitcoin would thus potentially enter in a long phase of lateralization which can last from six to twelve months.
But if the current context thus benefits ProShares and its ETF investors, is such a fund beneficial to the crypto markets in general?
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The GameStop lesson still wasn’t enough
A reminder title, a short strategy on an asset consists of borrowing assets and sell them in anticipation of a drop in price.
When this drop occurs, the borrower can then purchase a greater amount of assets with the proceeds of his previous sale. He then repays the lender, and keeps additional assets as a profit.
This type of practice may be common in the world of finance, but it is not unanimous. This strategy makes collateral victims with small investors who are more willing to put on a rise in the price of the asset.
This aggressive nature of asset short sales had, moreover, prompted the Wallstreetbets group to carry out an attack on hedge funds.
The group then coordinated to lose billions of dollars to these large funds which had taken positions short against GameStop (GME) action.
But beyond these reproaches against short strategies, the CEO of ProShares, Michael L. Sapir, has obviously a completely different view of the product of his company. He describes this new Bitcoin ETF as a way for investors to “conveniently get short bitcoin exposure “.
Michael L. Sapir notably underlined the fact that this ETF can be purchased “in a traditional brokerage account”.
These investors betting against Bitcoin, would therefore welcome a again from the recent drop below $20,000. This rather special ETF could however pleasantly surprise all the markets. Bulls may need more bears in the markets, after all, to get back in the game.
With spectacular rises and persistent falls, Bitcoin continues to take center stage, and it is not about to stop. Come and prepare for the future by registering on the leading Binance platform, the benchmark crypto exchange (affiliate link)