30 Aug 2022

BITI short exposure to new ATH after quiet months

The net exposure of ProShares’ short bitcoin ETF has grown by 70% in the last two weeks, leading the net short exposure of BITI to reach a new all-time high on Monday, August 29th.
Source: Proshares, Tradingview (Coinbase)
BITI, ProShares’ short bitcoin ETF, has experienced growing inflows over the last few weeks, leading the BITI AUM to recover and surpass previous all-time highs. The growing inflows into BITI in recent weeks is further evidence that market participants actively seek to position for more downside in bitcoin and has likely contributed to sending CME’s BTC futures into backwardation. Overall, the net short exposure of 4,310 BTC in BITI is small in absolute terms in addition to being small compared to ProShares’ long BTC ETF, BITO’s current exposure of 32,200 BTC. Nevertheless, while BITI has experienced substantial inflows in the last two weeks, BITO has experienced outflows equivalent to 1725 BTC, further enhancing the net effect on CME’s basis. It’s worth noting that spiking inflows to BITI have coincided with bitcoin reaching short-term bottoms. The short exposure of BITI peaked on July 1st, with BTC trading at $19,300, and again on July 13th with BTC trading at similar prices, and once more on July 26th, coinciding with BTC bottoming at $20,500. All peaks this summer have occurred as the downside pressure in BTC reached a point of exhaustion. History to repeat again?
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