ProShares has earlier today announced the launch of an exchange-traded fund (ETF) tailored for investors looking to bet against Ethereum, the world’s second-largest crypto by market capitalization.
The ProShares Short Ether Strategy ETF is a financial instrument that aims to provide returns that inversely correspond to the daily performance of its underlying index, the Standard & Poor’s CME Ether Futures Index.
This ETF by ProShares is structured to increase in value when the price of Ethereum decreases, offering a strategic tool for investors who hold 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 engage with the volatile crypto market without directly shorting the asset.
Navigating The Ethereum Market With Futures-Based ETFs
While investors are keenly awaiting the US Securities and Exchange Commission’s approval for spot crypto ETFs, the market has been provided with alternatives tied to futures contracts.
The ProShares Short Ether Strategy ETF joins these ranks, differentiating itself by focusing on the inverse performance of Ethereum’s price movements.
The first few days of October October saw the first batch of Ethereum ETFs launched, with ProShares unveiling three out of nine new products. However, the reception was tepid compared to the enthusiastic response garnered by their Bitcoin Strategy ETF previously.
Michael Sapir, CEO of ProShares, highlighted the new product as a solution to the difficulties associated with obtaining short positions in Ether, which can often be cumbersome and costly. Sapir noted:
SETH is designed to address the challenge of acquiring short exposure to ether, which can be onerous and expensive.
Challenges And Potential Of Inverse Crypto ETFs
Notably, this ETF follows in the footsteps of ProShares’ inverse offering in the Bitcoin space, the ProShares Short Bitcoin Strategy ETF, which currently holds approximately $74 million in assets, according to Reuters.
Despite its approach, the ProShares Short Bitcoin Strategy ETF has not been immune to market pressures. After reaching an all-time high after the FTX collapse, the fund’s value has since significantly declined, falling to a record low this year.
For context, just over a year ago, this fund was celebrated in 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% within the past year.
Furthermore, at the time of writing, ProShares Short Ethereum Strategy ETF doesn’t seem to have any chart yet when searched on TradingView. However, on the symbol overview page, TradingView shows a value of $40.43.
Featured image from Unsplash, Chart From TradingView