ProShares Debuts 2X Leveraged/Inverse Bitcoin ETFs

ProShares added to its portfolio of bitcoin-related products today with the launch of two ETFs. One offers leveraged exposure and the other offers inverse exposure to physical bitcoin rather than bitcoin futures. The ProShares UltraBitcoin ETF (NYSE Arca: BITU) looks to provide 2x the daily price performance of bitcoin as represented by the Bloomberg Bitcoin Index. Meanwhile, the ProShares UltraShort Bitcoin ETF (NYSE Arca: SBIT) aims to deliver investors 2x the inverse of the daily performance of the same reference index.

The two funds have expense ratios of 0.95%.

“BITU and SBIT are designed to address the challenge of acquiring leveraged or short exposure to bitcoin, which can be onerous and expensive,” said Michael Sapir, CEO of ProShares.

“BITU offers investors the opportunity to pursue magnified bitcoin returns or target a level of exposure with less money at risk. SBIT allows investors to seek to profit when the price of bitcoin drops or hedge their bitcoin exposure,” he added.

The two funds achieve their exposures by investing in a combination of swap agreements and money market instruments, according to their prospectuses. SBIT is the first fund to offer -2x exposure to the price of bitcoin, ProShares said.

A Pioneer in Bitcoin ETFs

The issuer scored a major victory in October 2021 when it brought the first U.S.-listed bitcoin futures ETF to market. The ProShares Bitcoin Strategy ETF (BITO) rapidly gathered its first $1 billion in assets and, with $3 billion in assets today, dwarfs all other bitcoin futures ETFs.

When physical bitcoin ETFs launched to much fanfare in January of this year, however, ProShares largely stayed away from the melee. The firm also offers the $97.4 million ProShares Short Bitcoin Strategy ETF (BITI), which provides inverse exposure to the price of bitcoin, as well as multiple funds that incorporate exposure to ether futures or combinations of bitcoin and ether futures.

The ProShares lineup includes more than 140 ETFs, with total assets under management of $71.6 billion. The issuer’s largest fund is the ProShares UltraPro QQQ ETF (TQQQ), with $22 billion in assets.

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