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

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Bitcoin (BTC) remains a popular institutional investment target in July, but money isn’t betting on a bright future.

According to data from research firm Arcane Research published on 6 July, institutional inflows are focused on products that offer the risk of shorting BTC in the first week of the month.

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Shorting bitcoin is the name of the game

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

The data confirms that this trend has only accelerated in July, with short exposure exceeding 300%.

“BITI, First Inverse BTC ETF, Surges Even More Last Week,” Arcane Abbreviation Twitter in the comments.

“After becoming the second-largest bitcoin-related BTC ETF in the US after just four days of trading, net short exposure has further increased, surging over 300% over the past week.”
ProShares Short Bitcoin Strategy ETF (BITI) exposure chart. Source: Mysterious Research/Twitter

The timing of BITI in the US is unique, as BTC/USD has dropped to a multi-year low of $17,600.

As Cointelegraph reported, expectations are trending downwards among analysts, and the BITI flow confirms that institutional sentiment is similar.

Separate data published on July 4 by digital asset investment firm CoinShares meanwhile put the weekly inflow into short BTC products at $51 million – easily the majority of the week’s total of $64 million.

While the long-term BTC investment was only $20 million, CoinShares highlighted the continued demand for such products, although the shorts stole the limelight.

“This suggests that investors are adding long positions at current prices, rather than renewing negative sentiment due to an influx in short-bitcoins, possibly for the first time in the US,” it wrote.

Business as usual (or lack thereof) for GBTC

Meanwhile, testing times remain for the strong institutional bitcoin investment vehicle, Grayscale Bitcoin Trust (GBTC).

RELATED: Bitcoin Price Reachs $23K on Potential Springboard as DXY Cools Off

After US regulators rejected Grayscale’s application to convert the trust into a bitcoin spot ETF, the firm began legal action, indicating the frustration facing the industry dealing with both regulatory scrutiny and the collapse in asset prices. Is.

The so-called GBTC premium, the difference between the bitcoin spot price and GBTC shares, has been negative for over a year, becoming discounted by more than 30% at several points.

GBTC Premium vs Asset Holdings vs BTC/USD chart. Source: Coinglass

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