ProShares announced the launch of the inaugural exchange-traded fund (ETF) for investors seeking a bearish position on Ethereum, the world’s second-largest cryptocurrency, on Thursday.
Named the ProShares Short Ether Strategy (SETH.N), this ETF is structured to provide the inverse of the daily performance of the Standard & Poor’s CME Ether Futures Index. To clarify, when the index experiences a 1% decline, the ETF strives to deliver a corresponding 1% return.
Similar to other cryptocurrency ETFs, this new offering is linked to futures contracts associated with Ethereum, as opposed to the token’s immediate market price. The market is eagerly awaiting approval from the U.S. Securities and Exchange Commission for spot Bitcoin ETFs.
The initial set of Ethereum ETFs collectively debuted in early October, featuring three of nine new vehicles introduced by ProShares. The ProShares Ether Strategy ETF (EETH.N) is designed exclusively for Ethereum exposure, while the other two ETFs provide a combined exposure to both Ethereum and Bitcoin.
The reception of these Ethereum ETFs has been less impressive, especially in comparison to the success of the ProShares Bitcoin Strategy ETF (BITO), which garnered around $1 billion in assets during its initial trading days. In contrast, the largest among the newly introduced Ethereum futures ETFs has accumulated assets of less than $10 million.
ProShares CEO Michael Sapir commented in a statement that the new inverse Ethereum ETF aims to tackle the challenges associated with acquiring short exposure to Ethereum, which can be both burdensome and costly.
ProShares also offers an inverse Bitcoin ETF, ProShares Short Bitcoin Strategy (BITI), which has amassed approximately $74 million in assets.
Roxana Islam, the head of sector and industry research at VettaFi, observed that while the market eagerly awaits final SEC approval for spot-based cryptocurrency ETFs, it is sensible for ProShares to introduce an inverse Ethereum product. She noted that this type of inverse strategy cannot be easily supplanted or substituted by a spot product.