Asset management company ProShares has submitted three new ETFs to the U.S. Securities and Exchange Commission (SEC), hoping to use Bitcoin to hedge against dollar risk while investing in the U.S. large-cap S&P 500, Nasdaq 100 indexes, and gold.
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More elaborate cryptocurrency ETFs are emerging
Proshares submits three Bitcoin hedge ETFs
More elaborate cryptocurrency ETFs are emerging
As Trump's second presidential term is about to begin, senior executives and lawyers involved in ETFs say they are devising strategies to cater to all types of investors. The range of products they describe is broad, from defensive ETFs aimed at professional fund managers curious about cryptocurrencies to comprehensive speculative bets for 'gamblers'. Bloomberg ETF analysts Eric Balchunas and James Seyffart also predict a wave of new cryptocurrency ETFs by 2025.
(Bloomberg: A variety of cryptocurrency ETFs will emerge in 2025)
The SEC approved the Hashdex Nasdaq Crypto Index US ETF and the Franklin Crypto Index ETF before Christmas, which will initially hold both Bitcoin and Ether, expected to launch in January.
Vivek Ramaswamy's asset management company Strive Asset Management has also submitted an application for the Strive Bitcoin Bond ETF to the SEC, which will track convertible bonds issued for purchasing Bitcoin, essentially a microstrategy convertible bond ETF.
Bitwise submitted the Bitwise Bitcoin Standard Corporations ETF, which invests over 80% of its net assets in stocks of companies that adhere to the 'Bitcoin Standard', meaning companies that hold at least 1,000 Bitcoins.
Proshares submits three Bitcoin hedge ETFs
ETF issuer Proshares, skilled in futures and leveraged operations, has simultaneously submitted three Bitcoin-related ETFs, namely:
S&P 500 Bitcoin ETF
Nasdaq 100 Bitcoin ETF
Gold Bitcoin ETF
As the name suggests, these three ETFs are investments in the S&P 500 Index, Nasdaq 100 Index, and gold.
So what does this have to do with Bitcoin? Since all three ETFs are dollar-denominated, the fund will use Bitcoin futures to hedge against dollar short/BTC long and will rebalance monthly, hoping to mitigate the impact of changes in the dollar's value relative to Bitcoin.
ETF Store President Nate Geraci believes this is essentially a long position in underlying stocks or gold, then using Bitcoin futures to short the dollar and go long on BTC, which he refers to as Bitcoin hedge ETFs.
