BITI offers investors the opportunity to potentially profit when the daily price of bitcoin declines
ProShares, a premier provider of ETFs and the largest provider of bitcoin-linked ETFs* in the United States, announced today that its new short bitcoin strategy fund (BITI) traded more than 870,000 shares, or $35 million of value, on its second day of trading.
“With our launch of BITI yesterday, we are pleased to have provided investors access to the first short bitcoin strategy ETF in the United States,” said ProShares CEO Michael L. Sapir. “The reception that BITI is getting in the market affirms investor demand for a convenient and cost-effective ETF to potentially profit or hedge their cryptocurrency holdings when bitcoin drops in value.”
BITI can help address the challenge of acquiring short exposure to bitcoin, which can be onerous and expensive for many investors. Many cryptocurrency exchanges impose stringent restrictions that make it extremely challenging for investors to short spot bitcoin. Further, the financing costs associated with traditional methods of obtaining short exposure can reach between 5% and 20%, or more—making BITI a more cost-efficient approach.
BITI is designed to deliver the inverse (opposite) of the performance of the S&P CME Bitcoin Futures Index. It seeks to achieve its objective on each investment day and for no other period. BITI seeks to obtain exposure through bitcoin futures contracts.
BITI’s public listing follows ProShares’ introduction of BITO, the first U.S. bitcoin-linked ETF, in October 2021.
“We are pleased to welcome BITI, ProShares’ new inverse bitcoin ETF, to the NYSE, the home of innovation in the ETF industry,” said Douglas Yones, head of exchange traded products at the NYSE. “With BITI and its earlier launch of BITO, ProShares is now the first issuer to offer ETFs that provide opportunities when bitcoin increases and decreases in value.”
For investors who prefer a mutual fund, ProFunds, the affiliated mutual fund company of ProShares, launched a new Short Bitcoin Strategy ProFund (BITIX) today. The BITIX mutual fund will have the same investment objective as BITI. Previously, ProFunds launched the first bitcoin-linked mutual fund, BTCFX, in July 2021.
ProShares has been at the forefront of the ETF revolution since 2006. ProShares now offers one of the largest lineups of ETFs and, along with its affiliates, manages more than $50 billion in assets. The company is the leader in strategies such as dividend growth, interest rate hedged bond, thematics and geared (leveraged and inverse) ETF investing. ProShares continues to innovate with products that provide strategic and tactical opportunities for investors to manage risk and enhance returns.
*Based on assets under management as of May 31, 2022.
Investors could potentially lose the full value of their investment within a single day.
The ProShares Short Bitcoin Strategy ETF seeks a return that is -1x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next, and not for any other period. Due to the compounding of daily returns, holding periods of greater than one day can result in returns that are significantly different than the target return. The Fund’s returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced due to the high volatility associated with this Fund’s benchmark. Investors should monitor their holdings as frequently as daily. Investors should consult the prospectus for further details on the calculation of the returns and the risks associated with investing in this product.
There is no guarantee the Fund will achieve its investment objective. This Fund may not be suitable for all investors.
Investing involves risk, including the possible loss of principal. The Fund is non-diversified and entails certain risks, including risk associated with the use of derivatives (e.g., futures contracts and similar instruments), imperfect benchmark correlation, leverage and market price variance, all of which can increase volatility and decrease performance. The Fund should lose money when the daily price of bitcoin futures rises. Please see the summary and full prospectuses for a more complete description of risks.
Bitcoin and bitcoin futures are a relatively new asset class and the market for bitcoin is subject to rapid changes and uncertainty. Bitcoin and bitcoin futures are subject to unique and substantial risks, including significant price volatility and lack of liquidity. The value of an investment in the ETF could decline significantly and without warning, including to zero.
The ETF does not invest directly in or hold bitcoin. The price and performance of bitcoin futures should be expected to differ from the current “spot” price of bitcoin (the price of bitcoin that can be purchased immediately). These differences could be significant. Bitcoin futures are subject to margin requirements, collateral requirements and other limits that may prevent the ETF from achieving its objective. Margin requirements for futures and costs associated with rolling (buying and selling) futures may have a negative impact on the fund's performance and its ability to achieve its investment objective.
Bitcoin is largely unregulated and bitcoin investments may be more susceptible to fraud and manipulation than more regulated investments. Bitcoin and bitcoin futures are subject to rapid price swings, including as a result of actions and statements by influencers and the media, changes in the supply of and demand for bitcoin and bitcoin futures contracts and other factors.
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in the ETF’s summary and full prospectuses. Obtain them from your financial professional or proshares.com. Read them carefully before investing.
Shares of any ETF are generally bought and sold at market price (not NAV) and are not individually redeemed from the fund. Your brokerage commissions will reduce returns.
ProShares ETFs (ProShares Trust and ProShares Trust II) are distributed by SEI Investments Distribution Co., which is not affiliated with the funds' advisor or sponsor.
Tucker Hewes, Hewes Communications, Inc., (212) 207-9451, firstname.lastname@example.org