ProShares seeks SEC approval for Bitcoin-backed ETFs that track the S&P 500, Nasdaq-100 and gold.
Key receivers
ProShares offers ETFs that track the S&P 500, Nasdaq-100 and Bitcoin-denominated gold. Rather than investing directly in Bitcoin, these ETFs use Bitcoin futures to earn Bitcoin-denominated returns.
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ProShares, a prominent asset manager that manages more than $75 billion in assets, is seeking SEC approval to offer three new ETFs that track the S&P 500, Nasdaq-100 and gold against Bitcoin.
The proposed funds — ProShares S&P 500 Bitcoin ETF, ProShares Nasdaq-100 Bitcoin ETF and ProShares Gold Bitcoin ETF — measure returns in bitcoin rather than U.S. dollars, according to prospectus materials shared by ETF Store President Nate Gerasi. Management fees and ticket marks are not disclosed.
While the funds cannot invest directly in Bitcoin, they use Bitcoin futures contracts to earn Bitcoin-based income. Each ETF takes a long position in its respective underlying asset through futures contracts along with a short USD/long bitcoin position.
“Resetting monthly, the currency hedge is intended to reduce the impact of fluctuations in the US dollar against bitcoin,” according to the materials.
“Basically, using BTC futures, a long position in the underlying stocks or gold and then a short USD/long BTC position,” Gerasi explained. “I'm calling these BTC hedged ETFs.”
Each Fund plans to invest up to 25% of its total assets in its wholly-owned Cayman Islands subsidiaries at the end of each quarter in order to maintain regulated investment company status under US tax law.
ProShares' move comes amid growing crypto acceptance in traditional finance as more asset managers explore ways to integrate Bitcoin into their investment offerings.
On Thursday, Strive Asset Management introduced the Strive Bitcoin Bond ETF, which provides exposure to Bitcoin through derivatives backed by volatile securities and primarily microstrategy holdings.
The fund invests at least 80% of its assets in Bitcoin bonds, swaps and options, while holding positions in US Treasury securities and other crypto-focused funds.
ProShares is known for its innovative investment strategies and diverse product offerings. The firm focuses on various types of ETFs, including leveraged and inverse ETFs that aim to amplify the performance of underlying indexes.
In early January, ProShares launched five leveraged and inverse Bitcoin ETFs designed to track the Bloomberg Galaxy Bitcoin Index using futures contracts.
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