If approved by the SEC, this would be the first such ETF in the US.

An inverse ETF works opposite to the index it tracks. An investor in a short bitcoin ETF would make money if bitcoin, and the tracking index, declines. In Canada, the BetaPro Inverse Bitcoin ETF (TSE: BITI) has been trading since April 2021. In the US there is no similar product, but that could change, because ProShares has applied for one. (Yahoo Finance)

ProShares Short Bitcoin Strategy ETF

The SEC has previously approved ProShares’ Bitcoin Strategy ETF (NYSEARCA: BITO), an actively managed futures-based bitcoin ETF that has been trading since October 2021.

Now ProShares has filed for the ProShares Short Bitcoin Strategy ETF, which is an inverse ETF that will similarly be based on bitcoin futures.

It will track the CME Bitcoin Futures Contracts Index. “The Fund seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the Index,” says the filing. “The Fund does not seek to achieve its stated investment objective over a period of time greater than a single day.”

SEC rejected similar ETF proposed by Direxion

In October of last year, ETF issuer Direxion applied for the Direxion Bitcoin Strategy Bear ETF that would have maintained a short exposure to bitcoin futures contracts issued by the Chicago Mercantile Exchange.

However, apparently in response to a request from SEC staff, Direxion requested to withdraw its application.

If the SEC now approves the ProShares Short Bitcoin ETF, it would be the first such product to trade in the US.

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