ProShares announces first Bitcoin-linked ETF in the US
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Answer ProShares announces first Bitcoin-linked ETF in the US
ProShares, the leading provider of bitcoin ETFs in the United States, announced Tuesday that it will launch the first ETF that tracks bitcoin’s decline in the country.
The new fund will allow investors to gain exposure to a short position on leading cryptocurrencies, effectively betting on the asset’s performance.
Hedging against Bitcoin:
in press release From “ProShares,” it said that the company’s new fund would allow investors to potentially profit from Bitcoin’s decline.
A Bitcoin Short ETF is a type of forward agreement to sell a specific asset or commodity at a predetermined price, on a future date.
With futures contracts, one can guarantee a reliable return on their sales in the future, even under unpredictable market conditions.Read:It is now possible to buy Tesla shares on the Bittrex cryptocurrency exchange
Many futures contracts are settled for cash, which means they are ultimately betting on the price.
In other words, short sellers simply debit or credit their purchases at the difference between the initial price and the final settlement, rather than actually delivering the asset.
The new fund, which will be listed under the symbol BITI on the New York Stock Exchange, will back-perform the S&P CME Bitcoin Index futures contract.
Michael L. thinks. Sapir, CEO of ProShares, said that recent events have proven what kind of benefit a short-term ETF can provide, and added:
BITI offers investors who believe that the price of bitcoin will fall with a potential opportunity to profit or hedge their cryptocurrency holdings.
ProShares will also launch the Bitcoin Short Strategy ProFund (BITIX), a mutual fund with the same investment objective as BITI.
Spot Bitcoin ETF Still Not Available in USA:
ProShares is famous for being the first to launch a Bitcoin ETF in the USA, which is based on futures contracts.
Several other Bitcoin derivative ETFs have been launched in the US so far, but none based on direct exposure to Bitcoin.Read:IBM launches a blockchain-based application to monitor the coffee supply chain
Many crypto companies have shown their disappointment after the Securities and Exchange Commission (SEC) was reluctant to approve such a product, with some even smelling of tampering.
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