In a move to leverage the price volatility of Ether, ProShares launched the Short Ether Strategy ETF (NYSE:SETH) on Thursday. This ETF, which trades on NYSE’s Arca, is designed to streamline the process of shorting ETH and enable profits from Ether's price dynamics through traditional brokerage accounts, according to CEO Michael Sapir.
SETH is unique in its approach to gain exposure via Ether futures contracts, a strategy consistently employed across ProShares' crypto ETFs lineup. Sapir emphasized that SETH simplifies acquiring short exposure to ether and allows investors to profit during both increases and decreases in ether's price. However, he also cautioned investors about the unique risks associated with these investments due to their volatility and unpredictability.
The ETF reflects the inverse of the S&P CME Ether Futures Index's daily performance, aiming to benefit from Ether's price fluctuations. The strategy is similar to other ProShares' crypto-linked ETFs such as BITO, EETH, BETH, and BETE.
However, Sapir also highlighted additional challenges faced by ProShares' actively managed ETFs. These include the usage of futures contracts, imperfect benchmark correlation, leverage, and market price variance. These factors can amplify volatility and negatively influence performance. Notably, SETH is expected to experience losses when ether futures' daily price rises.
Despite the launch of SETH, interest in ether futures ETFs remains relatively subdued. The combined assets under management (AUM) for six recently launched ETH-based futures ETFs hover around $20 million.
SETH joins ProShares' crypto ETF lineup, which includes BITO and BITI (launched when Bitcoin fell below $20,000), EETH, BETH, and BETE.
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