An exchange-traded fund (ETF) allowing investors to place leveraged bets against the flagship cryptocurrency Bitcoin (BTC) has seen record inflows after cryptocurrency hit a new all-time high near $100,000 and started correcting.
According to a recent Bloomberg report the ProShares UltraShort Bitcoin ETF (SBIT) saw a record $18.8 million inflow on Monday, November 25, with the ETF aiming to double the inverse daily performance of BTC.
Bitcoin ETF Inflows Among The Highest This Year
Meanwhile the ProShares Short Bitcoin ETF (BITI) saw $23 million inflows over the last two trading sessions, among the highest it’s seen this year. These inflows came after significant speculative excesses on the cryptocurrency market.
ProShares UltraShort #Bitcoin exchange-traded fund $SBIT (2x leverage) saw its largest inflow ($18.8mn) since inception (in Apr) Monday.$IBIT https://t.co/lF3bqjkU7K pic.twitter.com/yuHzvelHj2
— Neil Sethi (@neilksethi) November 26, 2024
These excesses saw Nasdaq-listed business intelligence firm MicroStrategy (MSTR), the largest corporate holder of Bitcoin, trade at a premium of over three times the value of its Bitcoin holdings before it started correcting.
They also saw options contracts on the spot Bitcoin ETF offered by the world’s largest asset manager BlackRock debut with a $1.9 billion trading volume, with most of that volume being bets on its price increase.
Some traders were even betting on the price of the iShares Bitcoin Trust (IBIT), BlackRock’s spot Bitcoin ETF, to essentially double within a month, which would imply a significant price increase for the flagship cryptocurrency as well.
Bets on the funds shorting BTC grew as the spot Bitcoin ETFs approved earlier this year to trade in the US saw around $438 million outflows, the third-biggest since they were launched, as BTC’s price corrected.
Bitcoin Price Drops Amid ‘Ultrashort’ Bets
The price of the cryptocurrency has dropped by nearly 7% since its peak near the $100,000 mark, to now stand at $93,150 after a significant correction. Bitcoin is still up more than 37.6% over the past month.
Bitcoin’s price started surging after Republican candidate Donald Trump won the US elections. His pro-crypto stance during his campaign fueled bets on the cryptocurrency market.
The recent drop likely further fueled the ‘ultrashort’ bets as investors often enter these positions for short-term strategies, given the leveraged involved.