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ProShares Launches First Short Ethereum ETF in the U.S.

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Web3 Station

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ProShares Launches First Short Ethereum ETF in the U.S.

ProShares has introduced the ProShares Short Ether Strategy ETF (SETH), the world's first short Ethereum ETF, offering investors increased profit opportunities when ETH prices decline.

ProShares Launches First Short Ethereum ETF in the U.S. Image: U Today

Last night (11/02), asset manager ProShares launched the ProShares Short Ether Strategy ETF (SETH). ProShares CEO Michael L. Sapir stated in a press release:

"SETH aims to address the challenge of exposure to Ethereum. Through this, ProShares aims to serve traders, providing them with additional opportunities to profit both when Ethereum prices rise and fall."

Shorting involves futures contracts that allow selling a specific asset or commodity at a predetermined price at a future date. The new ProShares ETF will trade under the ticker symbol SETH on the New York Stock Exchange (NYSE), providing performance opposite to the CME Ethereum Futures Index.

Prior to SETH, ProShares was authorized to list the following ETF products:

  • BITO: The first U.S. Bitcoin futures ETF launched in 2021, achieving $1 billion in trading volume on its first day.
  • BITI: An ETF betting on Bitcoin price declines, allowing investors to short BTC.
  • EETH: The first Ethereum futures ETF.
  • BETH and BETE: Two ETF products measuring the long positions of Bitcoin and Ethereum futures contracts monthly.

Currently, ETH is trading around $1,785, showing slight weekly declines but a more than 15% increase over the past year.

1-day chart of ETH/USDT pair on Binance as of 08:50 AM on November 3, 2023

The SEC has consistently approved derivative ETF products, not only from ProShares, but has firmly rejected ETFs directly tied to Bitcoin spot markets due to concerns about market manipulation and fraud.

However, despite being a positive signal, there has been relatively less interest in Ethereum futures ETFs from users. Evidence of this is the approximately $20 million total market value (AUM) across the six ETF products recently introduced.

It seems all eyes are focused more on the frenzy surrounding Bitcoin spot ETFs, especially after a series of Wall Street giants have applied to launch such products, including VanEck, Bitwise, WisdomTree, Valkyrie, Fidelity, Invesco, ARK Invest, Global X, Hashdex, Franklin Templeton, and Grayscale.

Crypto ETF proposals under SEC consideration. Image: Bloomberg (10/17/2023)

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