380% up: Here’s how investors are making money as Bitcoin tumbles

Lavina Daryanani
Source: BTCC

During adverse market conditions, investors usually look for hedges to shield their funds. Bitcoin, as such, possesses the inflation hedge label but hasn’t been able to deliver it of late. One of WatcherGuru’s recent analyses brought to light that gold has been able to perform better on this front compared to the dubbed digital gold.

With investors looking to put their eggs in different baskets, the demand for other investment alternatives has gradually been rising. As a result, several new vehicle launches have taken the place of late, with ProShares’ short Bitcoin strategy ETF being one among them.

While the Bitcoin short ETF launch got delayed amidst a sell-off, an expense ratio of 0.95%, ProShares’ short BTC ETF began trading on Tuesday on the NYSE under the ticker BITI.

BITI, as such, is designed to deliver opposite to the performance of the S&P CME Bitcoin Futures Index, for it essentially obtains exposure via Bitcoin futures contracts.

BITO down, BITI up, or is the other way round?

Contrary to expectations, the launch wasn’t well-received. BITI had a pretty slow start as the volumes ticked in were malnourished. In the first hour of trading, Bloomberg Intelligence’s James Seyffart brought to light that only $1 million in volume was registered.

For context, it is worth recalling that ProShares’ Bitcoin Strategy ETF, BITO, clocked in $200 million in just the first 15 minutes of trading.

The numbers drastically improved on Wednesday. Per the latest data, BITI traded more than 870,000 shares, or $35 million of value, on its second day of trading. The same translates to a jump of approximately 380% compared to the cumulative day 1 volume.

Comparing the past two days’ performance of BITO and BITI, a 9% fluctuation was noted. The former shed value, while the latter gained. The same re-emphasizes that investors are flocking toward the short Bitcoin investment vehicle.

Source: TradingView

Opining on the said hike, ProShares CEO—Michael L. Sapir—said,

“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. 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.”