Proshares, a Maryland-based ETF provider, will launch the first Bitcoin Short ETF Tuesday, according to a Monday announcement. The ETF will provide short exposure to people who do not believe in BTC over the long term or shrink exposure to BTC as crypto holders try to hedge their bet.

The ProShares Short Bitcoin Strategy will trade on the New York Stock Exchange with the ticker BITI, intended to grant investors a method to profit from declines in the price of Bitcoin. The fund will have an expense ratio of 0.95%.

In a Monday news release, Proshares CEO Michael Sapir said, "As recent times have shown, bitcoin can drop in value." He continued, "BITI affords investors who believe that the price of Bitcoin will drop with an opportunity to potentially profit or to hedge their cryptocurrency holdings. BITI enables investors to conveniently obtain short exposure to Bitcoin through buying an ETF in a traditional brokerage account."

Although this is a first for the NYSE stock exchange, the Toronto market has seen a short ETF listed for some time, created by the firm Horizons ETFs. Horizons BetaPro Inverse Bitcoin ETF has been available since April 2021. Due to their listing on seperate exchanges, Horizon’s short ETF is confusingly under the same ticker as ProShares, BITI. According to Horizon's website, the Canadian ETF is up 67% since its inception and 38% in the last month.

Bitcoin, down over 30% in the last two weeks, can be subject to massive volatility, like most other assets in the crypto space. This short ETF can provide a way for investors to hedge their long-term BTC bets by covering their losses when they feel the market is too high.

Author: Garrett Meifert