ProShares has submitted applications for ETFs that will track the S&P 500, Nasdaq-100, and gold in relation to Bitcoin.
These ETFs will utilize Bitcoin futures to generate returns measured in Bitcoin instead of directly purchasing Bitcoin.
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ProShares, a major asset manager with over $75 billion in assets, is requesting SEC approval for three new ETFs that would track the S&P 500, Nasdaq-100, and gold prices indexed to Bitcoin.
The proposed ETFs — ProShares S&P 500 Bitcoin ETF, ProShares Nasdaq-100 Bitcoin ETF, and ProShares Gold Bitcoin ETF — will report returns in Bitcoin terms instead of US dollars, based on prospectus documents provided by Nate Geraci, president of The ETF Store. The management fees and ticker symbols for the funds have yet to be announced.
While these funds won’t invest directly in Bitcoin, they will use Bitcoin futures contracts to generate Bitcoin-denominated returns. Each ETF will maintain a long position in its corresponding underlying asset while also employing a short US dollar/long Bitcoin position via futures contracts.
“Reset monthly, the currency hedge is intended to minimize the effect of fluctuations in the value of the US dollar compared to Bitcoin,” stated the documents.
“Basically a long position in underlying stocks or gold & then a short USD/long BTC position using BTC futures,” explained Geraci. “I’m referring to these as BTC-hedged ETFs.”
Each fund aims to allocate up to 25% of its total assets into wholly-owned subsidiaries in the Cayman Islands at the end of each quarter to maintain their regulated investment company status under US tax regulations.
ProShares’ initiative arises amid increasing integration of crypto into traditional finance as more asset managers look for ways to incorporate Bitcoin into their investment portfolios.
Recently, Strive Asset Management unveiled the Strive Bitcoin Bond ETF, which provides Bitcoin exposure through convertible securities and derivatives primarily linked to MicroStrategy’s holdings.
This fund plans to invest at least 80% of its assets in Bitcoin bonds, swaps, and options, while also holding positions in US Treasury securities and other crypto-related funds.
ProShares is recognized for its innovative investment strategies and wide range of product offerings. The firm specializes in various ETF types, including leveraged and inverse ETFs designed to amplify the returns of underlying indices.
Earlier this January, ProShares filed for five leveraged and inverse Bitcoin ETFs aimed at tracking the Bloomberg Galaxy Bitcoin Index using futures contracts.
