James Spillane
ProShares launches Short Bitcoin ETF after Bitcoin crashed by 74%, and the rest of the market wonders if more downside is on the horizon.
Cryptoassets are a highly volatile unregulated investment product.
ProShares Short Bitcoin Strategy ETF
Using the ticker BITI, the ProShare Short Bitcoin Strategy ETF launched on 21 June 2022. BITI opened around $38 and closed the day at just over $40. The ETF was established to enable investors to profit from Bitcoin’s declining price. Bitcoin set an all-time high of $69,000 in November 2021, followed by a massive crash to around $17,500 on 13 June 2022, losing 74% of its value.
BITI enters the market when many investors believe that crypto is in a full bear market. We know that the market is in extreme fear, which usually means that sentiment is swinging to even lower prices.
The launch of ProShares’ Short Bitcoin ETF has added more fear, uncertainty and doubt (FUD) to the market. It certainly seems that some mainstream outlets want you to believe that Bitcoin will set new lower lows. But is it possible that the Bitcoin bottom is in?
Possible Bitcoin Reversal
It’s rather strange that ProShares launches a short Bitcoin ETF at the exact time that the market is extremely bearish. Of course, it makes sense that a short ETF would be launched in a bear market, but where have we seen such strategies deployed before? If a Bitcoin (BTC) futures ETF was launched during a bull run, does that mean BTC is poised for higher prices? History proved that wasn’t the case.
The world’s biggest futures exchange, CME, launched a Bitcoin’s futures contract on 18 December 2017. At the time, Bitcoin had gone on a massive bull run, reaching its then ATH of $19,000. Many investors believed that BTC’s price would carry on higher because of CME’s Bitcoin ETF launch. What followed? Bitcoin reversed and went into a multi-year bear market. Perhaps that was the time to invest in altcoins.
Is it possible that ProShare’s Short Bitcoin ETF has marked the bottom the same way CME’s futures contract marked the top? The market will reveal the answer to us in the coming weeks and months. But BTC has some bullish signs, despite the majority of the market’s bear sentiment.
BTC price has been on a downward spiral for months, with no significant retracement. The crypto market has shown that after drastic price movement, a retracement follows. BTC is due for a retracement, but how high it will go and if now’s the time to invest in Bitcoin remains uncertain. The market has also shown that it’s normal for prices to retest previous ATHs before upside movement. BTC has now retested its previous ATH and has held steady.
Cryptoassets are a highly volatile unregulated investment product.
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This article was written for Business 2 Community by James Spillane.
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