The ProShares Short Bitcoin Strategy ETF, which allows traders to bet on a fall in bitcoin futures, hit a record low on Tuesday as the cryptocurrency surged on growing optimism that the launch of an exchange-traded fund tracking bitcoin is imminent.
Bitcoin, the world's largest cryptocurrency, hit an 18-month high on Tuesday, extending Monday's 10 per cent surge, on speculation over the likely approval of a spot bitcoin ETF that was fueled by BlackRock's iShares ETF listing on the website of clearing house DTCC.
The fund fell nearly 10 per cent to $16.18 in early trading, hitting a record low, and has shed 59.3 per cent so far this year. "A lot of people think this rally is a short squeeze - we have no real news coming out and a lot of anticipation around the SEC's approval or disapproval of these spot ETFs and people are getting ahead of themselves," said Lucas Kiely, chief investment officer at digital wealth platform Yield App.
Kiely added that people could also be trying to hedge their bitcoin."They've seen a price pump that they want to lock in so they buy the ETF to hedge their position."