ProShares launches inverse & leveraged ether ETFs

Jun 12th, 2024 | By | Category: Alternatives / Multi-Asset

ProShares has introduced two new tactical crypto-linked ETFs in the US for investors seeking leveraged or short exposure to the price of ether.

ProShares launches inverse & leveraged ether ETFs

Ether has experienced notable price volatility recently, driven by growing anticipation of upcoming ether ETFs.

The ProShares Ultra Ether ETF (ETHT US) delivers twice the daily performance (+200%) of the Bloomberg Ethereum Index, while the ProShares UltraShort Ether ETF (ETHD US) returns twice the inverse (-200%) of the same index.

ETHT and ETHD are listed on NYSE Arca with expense ratios of 0.94% and 1.01%, respectively. Notably, ETHD is the first ETF in the US to offer inverse leveraged exposure to ether, the world’s second-largest crypto asset by AUM.

The Bloomberg Ethereum Index, a composite of USD-ether trading activity from selected digital asset platforms, measures the performance of a single ether traded in US dollars. These platforms are evaluated based on governance, liquidity, and data integrity.

According to prospectus documents, the ETFs invest in financial instruments such as ether futures contracts and money market instruments, which ProShares believes should produce daily returns consistent with the funds’ objectives. Neither ETF invests directly in ether.

Ether has experienced notable price volatility recently, driven by growing anticipation of upcoming ether ETFs. Market excitement over these potential new investment vehicles has fueled speculative trading, contributing to sharp price movements. As regulatory approvals for these ETFs appear increasingly likely, investors are positioning themselves to capitalize on the expected influx of institutional funds, further amplifying ether’s price dynamics.

Investors should note that inverse and leveraged ETFs are only suitable for sophisticated traders who understand the risks involved. These products tend to decay in value if held for an extended period, potentially leading to significant losses, especially in volatile but range-bound markets.

Michael L. Sapir, CEO of ProShares, commented: “We are excited to introduce ETHT and ETHD. These new ETFs are designed to address the challenge of acquiring leveraged or short exposure to ether, which can be onerous and expensive.

“ETHT offers investors the opportunity to pursue magnified ether returns or target a level of exposure with less money at risk. ETHD allows investors to seek profit when the price of ether drops or hedge their ether exposure.”

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