Bitcoin Holds $20,000 Level... US Launches First 'Bearish Betting ETF'

Canada Previously Launched Bitcoin Short ETF Earlier

As Bitcoin attempts to hold the $20,000 mark, an exchange-traded fund (ETF) betting on Bitcoin's decline is set to be listed on the New York Stock Exchange (NYSE).
[Image source=Yonhap News]

[Asia Economy Reporter Kang Woo-seok] As Bitcoin successfully rebounded after the longest-ever decline and began efforts to maintain the $20,000 level, an exchange-traded fund (ETF) that invests in Bitcoin's decline is set to be listed on the New York Stock Exchange (NYSE).

As of the 21st (2 PM), Bitcoin is trading at $20,625 on Investing.com. After overcoming the longest-ever 12 consecutive days of decline on the 20th and recovering the $20,000 level, it has been fluctuating between $19,900 and $21,000, making every effort to defend the $20,000 mark.

On the 19th, Bitcoin fell below the $18,000 level, hitting a low of $17,599. It then rebounded to around $19,000 but soon dropped back to the $18,000 level.

However, since then, it has continuously rebounded, and Bitcoin's price is currently hovering around the $20,000 mark.

Bitcoin experienced a record-breaking rise during the COVID-19 pandemic, soaring from the existing $10,000 range to $64,000 in November last year, setting an all-time high.

However, prices rapidly declined due to high inflation and the Federal Reserve's 'Giant Step' aggressive interest rate hikes. Last month's crash of Korean cryptocurrencies Terra and Luna, as well as recent withdrawal suspensions declared by major crypto lenders Celsius and Babel Finance, also acted as negative factors across the cryptocurrency market.

Amid this bearish atmosphere in the cryptocurrency market, an ETF that 'bets' on Bitcoin's price decline is scheduled to be listed on the U.S. stock market for the first time.

According to CNBC on the 20th (local time), U.S. financial firm ProShares announced that it will list the 'Short Bitcoin Strategy ETF' on the New York Stock Exchange on the 21st (local time). This ETF is designed to generate profits when Bitcoin's price falls. This is the first time an ETF investing in Bitcoin's decline will enter the New York Stock Exchange. The ticker symbol is 'BITI.'

ProShares is also the asset manager that launched the first Bitcoin futures ETF in the U.S. last year. This time, it is also the first to list a 'short ETF.' Previously, in Canada, 'Horizons ETF' had introduced a Bitcoin short ETF.

Opinions are divided regarding the Bitcoin short ETF. Gaber Gubex, Head of Asset Strategy at global crypto asset manager VanEck Digital, criticized, "Approving a derivatives-based Bitcoin short ETF before listing a long spot Bitcoin ETF goes against investor protection," adding, "Regulation should be fair, logical, and focused on investor protection."

On the other hand, Michael Sapir, CEO of ProShares, stated, "(The Bitcoin short ETF) can even provide an opportunity for those who already hold cryptocurrencies to hedge (diversify risk)."