A Bitcoin short exchange-traded funds have quickly become a popular way for bearish crypto traders to bet against the digital currency.
The ProShares Short Bitcoin Strategy ETF (BITI)which allows investors to potentially profit from a decline in the price of bitcoin or hedge their exposure to the cryptocurrency, saw some $51 million in inflows over the past week, according to CoinShares.
BITI now has some $69.6 million in assets under management after listing in late June.
“Investment products saw inflows totaling $64 [million] last week,” CoinShares analysts said. “Although the big numbers mask the fact that a significant majority was in short bitcoin investment products ($51 million).”
However, CoinShares admitted that the inflows into BITI would likely have been due to the fact that the short bitcoin ETF was the first of its kind to offer ETF traders access to short or reverse exposure via futures on the market. Bitcoin.
“Inflows into short bitcoin may be driven by early US accessibility rather than renewed negative sentiment,” CoinShares said, adding that long bitcoin products from Canada, Europe and Germany had combined inflows of $20 million.
Other market watchers, however, have argued that entries into the short bitcoin ETF strategy could suggest traders are anticipating further weakness in the cryptocurrency market instead of a continued recovery ahead, CoinDesk reported. .
“People who are involved in the market think the bottom is yet to come, so if they can’t make money on the upside, they want to make money on the downside by shorting Bitcoin,” Pawel Cichowski, head of transactions at crypto exchange XBO, said in a Telegram message.
“With signs of a global recession looming and the bond yield curve inverting, no one knows for sure where bitcoin price will go next. However, based on ProShares stats, people prefer to expect the worst,” Cichowski added.
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