Bitcoin reached an 18-month high on Tuesday, propelling related exchange-traded funds (ETFs) upwards while causing the ProShares Short Bitcoin Strategy ETF to tumble to a new low. The recent bitcoin rally has been fueled by speculation around the potential approval of a spot bitcoin ETF, further ignited by BlackRock (NYSE:BLK)’s iShares ETF appearing on the clearing house DTCC’s website.
The ProShares Short Bitcoin Strategy ETF, designed to short bitcoin futures, fell to a record low of $16.18. This was a significant drop from its peak of $45.61, which it achieved following the collapse of FTX. Despite this downturn and a 59.3% loss in 2021 according to Lipper data, the fund, holding net assets worth $62.98 million, is projected to record its second month of inflows.
Lucas Kiely from digital wealth platform Yield App suggested that investors are buying on rumors and utilizing the BTC short ETF as a tool to express their belief in an impending BTC sell-off or as a hedge against a BTC short squeeze.
Meanwhile, other bitcoin-related ETFs experienced gains. The ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Miners ETF saw increases of over 9%. Newly launched funds such as the Valkyrie Bitcoin and Ether Strategy ETF, which tracks Ether futures, also reported a rise of 9.4%.
