ProShares has announced it will withdraw its proposal for a 2x leveraged Bitcoin Exchange-Traded Fund (ETF), the ProShares UltraBitcoin Strategy ETF. T
This sudden change of course comes less than two months after the asset management firm initially filed with the U.S. Securities and Exchange Commission (SEC) to launch the ETF.
It's important to note that the Amendment for the proposed ETF was yet to be declared effective and no securities have been sold under it.
The decision to withdraw the proposal for this first-of-its-kind Bitcoin ETF—intended to provide investors with exposure to Bitcoin prices at double the daily return—may come as a disappointment to many in the crypto space. ProShares is one of the leading providers of ETFs in the United States.
cardThe reasons for the abrupt withdrawal are not disclosed in the letter. However, it's possibly related to the ongoing scrutiny and hesitation from the SEC.
ProShares' Bitcoin futures exchange-traded fund (ETF), BITO, has underperformed against Bitcoin's price appreciation, largely due to structural costs associated with its futures contracts, according to a report from digital asset research firm K33 Research.
The underperformance illustrates the shortcomings of futures-based ETFs compared to potential spot ETFs