Short Bitcoin (BTC) ETF Hits Over 2-Mth High As Market Slumps

An exchange-traded product that shorts Bitcoin (BTC) hit an over two-month high on Friday, as the world’s largest crypto led a sharp decline in the market.

The 21Shares Short Bitcoin ETP, which trades exactly opposite to BTC, jumped 5.4% in the past two days to its highest level since late-February. This followed a 11% slump in BTC over the same period, which saw the token hit its lowest level since the onset of the Russia-Ukraine war.

Short BTC ETP surges in value this year

The short BTC ETP, which trades on European stock exchanges, is one of the best performing assets this year. The ETP is currently trading up nearly 8% for the year, far better than returns offered by most of the top-50 cryptocurrencies.

21Shares describes the ETP as seeking to provide a “-1x return to the performance of Bitcoin for a single day.” The ETP achieves this by borrowing BTC and simultaneously selling it.

But the product is also billed as high risk by the asset manager. 21Shares recommends the product only for investors willing to take on the risk of such an endeavor.

21Shares offers a slew of ETPs tracking different cryptocurrencies. The fund manager recently launched a product that hedges both BTC and Gold in one product.

Bitcoin short interest hits near 2-mth high

A Bitfinex index that tracks short interest in BTC shows that bearish positions on the token are at their highest since mid-March. The reading comes on the heels of one of BTC’s worst tumbles this year.

The token is now trading near its lowest levels this year, between $35,000 to $36,000. Traders are anticipating further losses in the token, as inflation and monetary tightening fears show little signs of easing.

The U.S. Federal Reserve hiked interest rates this week, as did central banks in the UK, Australia, and India. Several more banks have flagged tightening measures to combat a recent surge in inflation.