ProShares, the fund manager behind the first US Bitcoin futures ETF, recently applied for a new product that can be used to bet against the token.
A filing with the U.S. Securities and Exchange Commission revealed that ProShares plans to launch the Short Bitcoin Strategy ETF, which will move inversely to a CME index that tracks Bitcoin futures.
The move comes amid a pullback in BTC from March 2022 highs. The token has seen trading decline in recent days as investors await key economic signals from the US government.
Betting against BTC?
Essentially, the ETF can allow traders to gauge how much the market is betting against BTC. If approved by the SEC, it could also become the first US ETF to allow trading against the token, Bloomberg reports.
It will likely be approved by the SEC as the regulator is open to crypto-related derivatives. It had approved ProShares’ Bitcoin Futures ETF last year, albeit with some caveats.
But the SEC has yet to approve funds that allow spot trading in BTC, and has rejected proposals from several notable asset managers. Most recently, the regulator rejected an ETF proposal from star investor Cathie Woods’ company.
The SEC cited the need for safeguards against the extreme volatility in crypto markets. It has also repeatedly criticized the potential for fraud and money laundering through crypto.
Still, crypto has seen a growing interest from trading houses this year, leading to the development of a wide variety of derivatives.
The regulatory landscape is changing
A changing regulatory landscape may eventually cause the SEC to soften its rhetoric. President Joe Biden’s executive order over crypto seemed largely positive for the industry, calling on major government agencies to collaborate in developing the space.
SEC Chairman Gary Gensler recently expressed hopes of bringing crypto markets in line with US capital market regulations. He also plans to have crypto tokens registered as securities.
Crypto may provide new ways for entrepreneurs to raise capital and for investors to trade, but we still need investor and market protection.
Strong crypto industry proponents have also predicted softer rhetoric from the SEC as adoption grows. SkyBridge Capital founder Anthony Scaramucci said last month that he expects to launch an SEC-compliant BTC fund by the end of 2022.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication is not responsible for your personal financial loss.
About the author
With over five years of experience in global financial markets, Ambar plans to leverage this knowledge for the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments could affect crypto markets and what that could mean for your bitcoin holdings. When he’s not scouring the internet for the latest news, you can play him video games or watch Seinfeld reruns. You can reach him at [email protected]
This post This Proposed ETF Could Enable Betting Against Bitcoin (BTC)
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