ProShares, the leveraged fund-focused issuer, has unveiled two boosted bitcoin products to capitalize of investors’ growing appetite for investment products focused on the world’s largest cryptocurrency by market value.
The ProShares Ultra Bitcoin ETF (BITU) will target double daily spot bitcoin returns, while the ProShares UltraShort Bitcoin ETF (SBIT) will follow the inverse path with -2x exposure. Both ETFs have an expense ratio of 0.95%, according to a Tuesday press release.
“A lot of people who invest in bitcoin are traders looking to make a quick buck by buying and selling bitcoin over short time periods,” explained etf.com analyst Sumit Roy. “Those short-term traders can use leveraged bitcoin ETFs to get more bang for their buck when bitcoin rises.”
The supercharged funds are debuting nearly three months after 10 spot bitcoin ETFs won Securities and Exchange Commission approval to begin trading. The ETFs, including BlackRock Inc.’s iShares Bitcoin Trust (IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC), have been the most lucrative ETF launches of all time, accruing over $60 billion in assets. IBIT, the largest, has generated an eye-popping $18 billion under management since early January.
Bitcoin’s price has risen a whopping 57% this year largely because of the ETF launches, although it is down 4% during the past seven days to fall near $66,000, about where it stood 10 days ago, according to CoinMarketCap.
Eager cryptocurrency investors have been pushing for the next phase of digital asset ETF products. Many of the same issuers that have rolled out spot bitcoin products have filed for spot Ethereum ETFs, which the SEC must decide on by May.
Spot Bitcoin Mania
Leveraged spot bitcoin funds are one way that investors can invest in cryptocurrency—or bet against it. While they can help some investors hedge their exposure to bitcoin, they can also contribute to the asset’s volatility.
ProShares CEO Michael L. Sapir said that the leveraged and short exposure can traditionally be “onerous and expensive,” but BITU and SBIT allow investors to “target a level of exposure with less money at risk.”
ProShares launched the first and largest bitcoin futures ETF, the ProShares Bitcoin Strategy ETF (BITO). Although that fund is the largest cryptocurrency futures ETF, it was not among the issuers that started spot bitcoin funds in mid-January.
Overall, ProShares has $72 billion in 143 U.S. trading ETFs, according to etf.com data. Its largest fund is the $22 billion ProShares UltraPro QQQ (TQQQ), which gives investors 3x daily exposure to the Nasdaq 100 index.
Contact Lucy Brewster at lucy.brewster@etf.com