We do the research, you get the alpha!
ProShares, a U.S.-based issuer of exchange-traded funds, today announced the launch of ProShares Short Ether Strategy ETF (SETH), letting investors profit from declines in the price of Ethereum (ETH), the second-largest cryptocurrency by market capitalization.
SETH, which is set to start trading on the New York Stock Exchange’s (NYSE) Arca, seeks to deliver the inverse of the daily performance of its underlying benchmark—the Standard & Poor's CME Ether Futures Index.
“You will lose money when the Index rises—a result that is the opposite from a traditional index fund,” reads the product’s summary prospectus. “Obtaining inverse or ‘short’ exposure may be considered an aggressive investment technique.”
It further states that an investment in SETH “may not be suitable for all investors” because if the Index approaches a 100% increase at any point in the day, “you could lose your entire investment.”
Ethereum was trading at $1,816 by press time, up 1.5% over the day, data from CoinGecko shows.
Earlier this year, ProShares also introduced Bitcoin Short ETF (BITI), a similar product whose performance is inversely correlated to the S&P CME Bitcoin Futures Index. In other words, investors profit when the price of Bitcoin (BTC) drops.
Decrypt has reached out to ProShares for additional comments.
ProShares’ crypto-linked ETFs
SETH joins ProShares’ lineup of other crypto-linked ETFs, which also includes ProShares Bitcoin Strategy ETF (BITO), the first U.S. Bitcoin futures ETF, ProShares Ether Strategy ETF (EETH), a futures-based fund tracking the performance of ETH, as well as BETH and BETE—the two ETFs that target the blended performance of Bitcoin and Ethereum, with market cap-weighted and equal-weighted exposure, respectively.
An ETF, or exchange-traded fund, provides investors with indirect exposure to an underlying asset. This can be useful for investors seeking exposure to commodities or cryptocurrencies, which can be difficult to transfer or store.
According to the firm, its crypto-linked ETFs offer investors several advantages over other ways of accessing the crypto market, such as direct ownership, trusts, or funds.
Among those advantages, ProShares said, is the fact that crypto-linked ETFs are traded on regulated exchanges, have transparent pricing and liquidity, and are subject to the same rules and regulations as traditional ETFs.
Edited by Liam Kelly.