The news that crypto platform FTX collapsed this week, failing to find a buyer to provide crucial liquidity, has rocked the digital assets landscape. With FTX CEO Sam Bankman-Fried resigning and FTX filing for bankruptcy, now may be the time for investors to short Bitcoin via the ProShares Short Bitcoin Strategy ETF (BITI ).
The FTX news is just the latest in this year’s “crypto winter,” which has seen Bitcoin’s price drop massively since January. Ethereum and other cryptocurrencies have also taken some hits in the most serious downturn for crypto since the 2018-2020 contraction, with the new winter arriving as a lot of previously cheap money has left for greener pastures.
The situation is so severe that at least one significant Bitcoin whale has moved 3,500 BTC to new wallets that had been dormant for more than a decade, with the crypto winter’s impact shaking the space to its foundations.
While uncertainty looms, Bitcoin itself still stands apart from other cryptocurrencies, with crypto firm NYDIG’s chair telling readers to avoid any digital currency except Bitcoin. Bitcoin still sits at $16,900, having stayed relatively stable at around $20,000 from June until late last month.
The recent drop-off presents an opportunity for investors to play the Bitcoin market via BITI and short the flagship cryptocurrency. BITI provides inverse exposure to Bitcoin futures, a geared product with daily resets designed to operate as a short-term trading tool. The ETF has outperformed other cryptocurrency ETFs over three months and over one month, returning 3% and 16.1% respectively compared to 0.2 and -4.3% on average for the ETF Database Category.
BITI tracks the S&P CME Bitcoin Futures Index and charges 95 basis points, having launched in June. The ProShares strategy currently holds $103 million in AUM and was up 19.7% over the last five days at press time.
Whether the crypto winter is only just beginning remains to be seen, but with so much uncertainty ahead, investors looking to short Bitcoin on its up-and-down rollercoaster ride should keep an eye on BITI as a real opportunity.
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