ProShares has earlier at this time announced the launch of an exchange-traded fund (ETF) tailor-made for traders seeking to guess towards Ethereum, the world’s second-largest crypto by market capitalization.
The ProShares Short Ether Strategy ETF is a monetary instrument that goals to offer returns that inversely correspond to the each day efficiency of its underlying index, the Standard & Poor’s CME Ether Futures Index.
This ETF by ProShares is structured to extend in worth when the value of Ethereum decreases, providing a strategic instrument for traders who maintain a bearish outlook on the way forward for this explicit digital asset.
According to the announcement, that is the primary of its form for Ethereum, giving investors a new way to engage with the volatile crypto market with out straight shorting the asset.
Navigating The Ethereum Market With Futures-Based ETFs
While traders are keenly awaiting the US Securities and Exchange Commission’s approval for spot crypto ETFs, the market has been supplied with options tied to futures contracts.
The ProShares Short Ether Strategy ETF joins these ranks, differentiating itself by specializing in the inverse efficiency of Ethereum’s value actions.
The first few days of October October noticed the primary batch of Ethereum ETFs launched, with ProShares unveiling three out of 9 new merchandise. However, the reception was tepid in comparison with the enthusiastic response garnered by their Bitcoin Strategy ETF beforehand.
Michael Sapir, CEO of ProShares, highlighted the brand new product as an answer to the difficulties related to acquiring brief positions in Ether, which might usually be cumbersome and dear. Sapir famous:
SETH is designed to deal with the problem of buying brief publicity to ether, which could be onerous and costly.
Challenges And Potential Of Inverse Crypto ETFs
Notably, this ETF follows within the footsteps of ProShares’ inverse offering in the Bitcoin space, the ProShares Short Bitcoin Strategy ETF, which presently holds roughly $74 million in assets, in keeping with Reuters.
Despite its strategy, the ProShares Short Bitcoin Strategy ETF has not been proof against market pressures. After reaching an all-time excessive after the FTX collapse, the fund’s value has since considerably declined, falling to a report low this 12 months.
For context, just over a 12 months in the past, this fund was celebrated in its peak worth of $45.61. However, it has since declined to $16.03, on the time of writing, representing a drop of over 60% throughout the previous 12 months.
Furthermore, on the time of writing, ProShares Short Ethereum Strategy ETF doesn’t appear to have any chart but when searched on TradingView. However, on the image overview web page, TradingView reveals a price of $40.43.
Featured picture from Unsplash, Chart From TradingView
