Investors betting against cryptocurrencies are targeting an exchange-traded fund backed by Bitcoin futures, amid the recent decline of the world’s biggest cryptocurrency, according to a report on Bloomberg.
The ratio of bets against the $748-million ProShares Bitcoin Strategy ETF or BITO has hit 11%, hovering around the highest level since it started in October 2021, according to data from the IHS Markit Ltd.
BITO’s ratio of open interest in bearish put contracts to call open interest has surged to hover around all-time highs since mid-April, indicating that bears are flooding to the fund in a bid to short sell the token.
The inflows of bets against BITO seem to serve as a proxy, as issuers such as Direxion, ProShares, and AXS file applications for similar offerings which would offer short exposure to Bitcoin futures contracts.
BITO has so far recorded a 37% decline this year, in line with the drop in Bitcoin.