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Friday, December 9, 2022

World’s first short Bitcoin ETF sees exposure explode 300% in days

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Bitcoin (BTC) stays a preferred institutional funding goal in July, however the cash is just not betting on a vivid future.

According to knowledge from analysis agency Arcane Research printed July 6, institutional flows targeted on merchandise providing exposure to shorting BTC in the first week of the month.

Shorting Bitcoin is the secret

Since launching in the United States in late June, the ProShares Short Bitcoin Strategy ETF (BITI), the first exchange-traded fund (ETF) to be “short” BTC, has proved a hit.

That development has solely accelerated in July, with short exposure leaping over 300% in days, knowledge confirms.

“BITI, the first inverse BTC ETF, grew additional final week,” Arcane summarized in Twitter feedback.

“After changing into the second-largest bitcoin-related BTC ETF in the U.S. after solely 4 days of buying and selling, the online short exposure has grown additional and elevated by greater than 300% final week.”

ProShares Short Bitcoin Strategy ETF (BITI) exposure chart. Source: Arcane Research/ Twitter

The timing for BITI in the U.S. is conspicuous in itself, coming as BTC/USD plumbed multi-year lows of $17,600.

As Cointelegraph reported, expectations amongst analysts stay skewed to the downside, and the BITI inflows seem to verify that institutional sentiment is likewise.

Separate knowledge published by digital asset funding agency CoinShares on July 4, in the meantime, put weekly inflows into Short BTC products at $51 million — easily the majority of the week’s total of $64 million.

While long BTC investments were just $20 million, CoinShares nonetheless highlighted persisting demand for such products despite shorts stealing the limelight.

“This highlights investors are adding to long positions at current prices, with the inflows into short-Bitcoin possibly due to first-time accessibility in the US rather than renewed negative sentiment,” it wrote.

Business (or lack of) as usual for GBTC

Testing times, meanwhile, remain for the stalwart institutional Bitcoin investment vehicle, the Grayscale Bitcoin Trust (GBTC).

Related: Bitcoin price approaches potential springboard to $23K as DXY cools surge

After U.S. regulators rejected Grayscale’s application to transform the Trust to a Bitcoin spot ETF, the agency started authorized motion, an indication of the frustration going through an business coping with each regulatory scrutiny and declining asset costs.

The so-called GBTC premium, the distinction between Bitcoin spot worth and shares of GBTC, has been damaging for over a 12 months, at a number of factors changing into a more than 30% discount.

GBTC premium vs. asset holdings vs. BTC/USD chart. Source: Coinglass

The views and opinions expressed listed here are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Every funding and buying and selling transfer includes threat, you need to conduct your individual analysis when making a choice.