Proshares short Bitcoin ETF has a dismal first day of trading, but gains 380% the next day

ProShares’ first short-short bitcoin ETF got off to a slow start on June 21, but saw a 380% increase in trading volume the next day.

On the day it launched, June 21, volume in the ProShares Bitcoin Short Strategy ETF (BITI) was a dismal 183,300 shares, with Bloomberg ETF analyst Eric Balchunas noting on Twitter that "less than Bitcoin's first 1% of the daily trading volume".

Trading volume, however, nearly quadrupled the next day to 886,200 shares worth about $36.2 million, according to Yahoo Finance.

The BITI exchange-traded fund (ETF) allows investors to take a short position in the bitcoin market without owning bitcoin. Going short means speculating that a market or asset will fall in value.

ProShares CEO Michael L. Sapir said Day 2 volumes indicated high demand and BITI's lower fee structure.

"BITI's popularity in the market affirms investors' demand for a convenient and cost-effective ETF that allows them to profit or hedge their cryptocurrency holdings when the value of Bitcoin falls."

ProShares also launched a Bitcoin Strategy ETF (BITO) on October 18 last year. BITO had a trading volume of approximately $1 billion on the first day of trading.

As of November, BITO was in the top 2% of all ETFs by volume, but has now lost 50.93% of its value.

Of course, $36 million pales in comparison to the $1 billion long position on day one. This could mean that most investors are unsure whether further declines lie ahead. The largest cryptocurrency by market cap has lost more than 30% of its value over the past 30 days.

BITI's relatively poor performance on launch day was ridiculed by Bloomberg Intelligence analyst James Seyffart. On June 21, Seyffart tweeted that in the first hour of trading, BITI only completed about $1 million in trading volume.

Seyffart said he expected the first day of trading to be low, but "yeah, that's not surprising at all. I have to admit though, I didn't expect it to be this low."

As of the close, BITI has completed a trading volume of approximately US$7.1 million, with an average daily price of US$39.06 per share.

Australia's newly launched Bitcoin ETF is also struggling to attract investor interest. In April, the Cosmos Purpose Bitcoin Access ETF (CBTC) is expected to attract $1 billion in inflows. However, the launch date of it and the ETFS 21Shares Bitcoin ETF (EBTC) has been pushed back to May 12. To date, CBTC has only $810,000 in assets under management, while EBTC has only $2.8 million in assets under management.

U.S. traders are still eager for a spot bitcoin ETF, but the SEC has rejected it for years. SEC Commissioner Hester Pierce believes that if industry insiders and regulators strengthen cooperation to ensure that both parties reach an agreement, a bitcoin spot ETF can be launched in the United States.