ProShares has earlier today Announced the launch of an exchange-traded fund (ETF) designed for investors looking to bet against ethereum, the world’s second-largest cryptocurrency by market capitalization.
The ProShares Short Ether Strategy ETF is a financial instrument that aims to provide returns that correspond inversely to the daily performance of its underlying index, the Standard & Poor’s CME Ether Futures Index.
This ProShares ETF is structured to increase in value when the price of ethereum declines, offering a strategic tool for investors who have a bearish outlook on the future of this particular digital asset.
According to the announcement, this is the first of its kind for ethereum, giving investors a new way to interact with the volatile cryptocurrency market without directly selling the asset.
Navigating the ethereum Market with Futures-Based ETFs
While investors eagerly await U.S. Securities and Exchange Commission approval for spot crypto ETFs, the market has welcomed alternatives tied to futures contracts.
The ProShares Short Ether Strategy ETF joins these ranks, differentiating itself by focusing on the inverse performance of ethereum price movements.
In the first days of October the first batch of ethereum ETFs was launched, with ProShares introducing three of nine new products. However, the reception was lukewarm compared to the enthusiastic response previously garnered by its bitcoin Strategy ETF.
Michael Sapir, CEO of ProShares, highlighted the new product as a solution to the difficulties associated with taking short positions in Ether, which can often be cumbersome and expensive. Sapir noted:
SETH is designed to address the challenge of acquiring short-term exposure to ether, which can be burdensome and expensive.
Challenges and Potential of Inverse crypto ETFs
Notably, this ETF follows on the heels of ProShares’ reverse offering in the bitcoin space, the ProShares Short bitcoin Strategy ETF, which currently holds approximately $74 million in assets, according to crypto-bears-2023-11-02/” target=”_blank” rel=”noopener nofollow”>Reuters.
Despite its approach, the ProShares Short bitcoin Strategy ETF has not been immune to market pressures. After hitting an all-time high following the FTX collapse, bitcoin-news/bitcois-surge-shakes-up-etf-world-whos-soaring-crashing/” target=”_blank” rel=”noopener nofollow”>the value of the fund since then decreased significantly, falling to a record low this year.
For context, jJust over a year ago, this fund was held at its peak value of $45.61. However, it has since declined to $16.03, at the time of writing, representing a drop of over 60% in the last year.
Additionally, at the time of writing, the ProShares Short ethereum Strategy ETF does not appear to have any charts yet when searching on TradingView. However, on the symbol overview page, TradingView shows a value of $40.43.
Featured image from Unsplash, chart from TradingView
