Bitcoin's year-to-date rise after 2022's sharp 64 percent drop has renewed interest from ETF issuers. At least three companies in the US filed applications to launch leveraged bitcoin futures ETFs in recent weeks, a product structure that does not yet exist in US markets.
However, bitcoin's recent rally has not been met with significant inputs across the board. For example, the $10 million Valkyrie bitcoin miners ETF, this year's best-performing unleveraged fund with a 127 percent gain, has raised just $5.7 million so far this year.
shorten bitcoin
Meanwhile, recent rumors about the second largest cryptocurrency, ether, could help explain why investors are turning to the short bitcoin ETF strategy. Although both bitcoin and ether have risen this year, the latter has lagged behind the original cryptocurrency by about 10 percentage points.
However, some investors now see Bitcoin catching up, especially after the highly anticipated Ethereum upgrade in Shanghai, which they feared would lead to the Ethereum token sale. But such a decrease did not materialize in the days after the update.
Broader cryptocurrency rally this year, partly driven by investors favoring digital assets amid banking turmoil in the United States and Europe, It has also led some to say that bitcoin could act as a safe haven in such an environment, although many have disputed that position.
"We are seeing a buildup of those looking for a 'safe' asset and those who believe the long-term upside more than outweighs the downside risk, which explains the entries in BITO," said Noelle Acheson, author of the Crypto is macro now Newsletter.
“Those who take little [bitcoin] bets could be counting on portfolio turnover out of [bitcoin] and in [ether]especially from [bitcoin] now he has attractive profits to secure,” he said.
Bitcoin briefly fell below $28,000 overnight, extending the cryptocurrency's two-day slide. It fell 2.3 percent in the past 24 hours to around $28,245, according to recent market data from CoinDesk.
Bloomberg
Bloomberg
