Important takeaways
- ProShares has filed for ETFs that track the S&P 500, Nasdaq-100 and gold priced in Bitcoin.
- These ETFs will use Bitcoin futures to achieve Bitcoin-denominated returns rather than directly investing in Bitcoin.
ProShares, a prominent asset manager overseeing more than $75 billion in assets, is seeking SEC approval to offer three new ETFs that would track the performance of the S&P 500, Nasdaq-100 and gold relative to Bitcoin.
The proposed funds – ProShares S&P 500 Bitcoin ETF, ProShares Nasdaq-100 Bitcoin ETF and ProShares Gold Bitcoin ETF – will measure returns in Bitcoin terms rather than US dollars, according to prospectus material shared by Nate Geraci, CEO of The ETF Store. Management fees and ticker symbols have not been disclosed.
While the Funds will not invest directly in Bitcoin, they will use Bitcoin futures contracts to achieve Bitcoin-denominated returns. Each ETF will maintain a long position in its respective underlying assets along with a short US dollar/long Bitcoin position through futures contracts.
“Reset monthly, the currency hedge is intended to mitigate the effects of changes in the value of the US dollar relative to Bitcoin,” according to the material.
“Basically a long position in underlying stocks or gold and then a short USD/long BTC position with BTC futures,” Geraci explained. “I call these BTC-backed ETFs.”
Each Fund plans to invest up to 25% of its total assets in wholly-owned Cayman Islands subsidiaries at each quarter-end to maintain regulated investment company status under US tax law.
ProShares’ move comes amid growing acceptance of crypto 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 ETFwhich offers Bitcoin exposure through convertible securities and derivatives primarily backed by MicroStrategy’s holdings.
The fund will invest at least 80% of its assets in Bitcoin bonds, swaps and options, while maintaining positions in US Treasuries and other crypto-focused funds.
ProShares has been known for its innovative investment strategies and diverse product offerings. The firm specializes in various types of ETFs, including leveraged and inverse ETFs that aim to amplify the performance of underlying indexes.
Earlier in January, ProShares filed for five leveraged and inverse Bitcoin ETFs designed to track the Bloomberg Galaxy Bitcoin Index using futures contracts.
