If you've ever seen Bitcoin move 10% in a single day—your heart racing as your investments plummet—you understand the agony of being too invested. Bitcoin Short ETFsExchange-Traded Funds designed to profit from a decrease in Bitcoin's price. enable you to make money from price declines, allowing you to hedgeAn investment strategy to reduce the risk of adverse price movements in an asset. your long crypto positionsOwning cryptocurrencies with the expectation that their price will increase. or even make money from declining prices. Instead of just waiting for the market to settle, you can position yourself to make money from bad days, smoothing out your returns.
How Do Bitcoin Short ETFs Work
Reverse Daily Targeting
An -1x ETFAn ETF that seeks to deliver the opposite of the daily performance of its underlying index or asset. Also known as an Inverse ETF. attempts to grow roughly as much as how much Bitcoin falls daily.
An –2x ETFAn ETF that seeks to deliver twice (or three times for -3x) the opposite of the daily performance of its underlying index or asset. Also known as a Leveraged Inverse ETF. (or –3x) ETF multiplies that effect, returning two or three times the inverse daily movement.
Futures and Swaps
These ETFs don't actually own BTC—they own futures contractsLegal agreements to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future. or swap agreementsDerivatives contracts through which two parties exchange the cash flows or liabilities from two different financial instruments..
Due to daily "resetting"The process by which leveraged and inverse ETFs adjust their exposure daily to maintain their stated leverage ratio relative to the underlying asset's performance. This can lead to compounding effects over longer periods., their longer-term action may deviate from the underlying instrument—so they are best suited to short-term approaches, instead of "set-and-forget."
Key Risks & Warnings
- Path DependencyThe phenomenon where the performance of a leveraged or inverse ETF over periods longer than one day can differ significantly from the simple multiple of the underlying asset's performance over that same period, due to daily rebalancing and compounding effects.: Over periods of upheaval, compounding can undercut returns.
- Funding RatesPeriodic payments exchanged between traders holding long and short positions in perpetual futures contracts, designed to keep the futures price close to the spot price. These can be a cost for short ETFs using futures.: Futures have funding charges that consume profit.
- Bid-Ask SpreadsThe difference between the highest price a buyer is willing to pay (bid) for an asset and the lowest price a seller is willing to accept (ask). Wider spreads mean higher transaction costs.: On smaller ETPsExchange Traded Product: A type of security that tracks an underlying security, index, or other financial instrument. ETFs are a type of ETP., low trading activity can make spreads wider, affecting execution.
Top 5 Bitcoin Short ETFs to Look at in 2025
1. ProShares Short Bitcoin Strategy ETF (BITI)
What it does: Seeks –1x the daily return of the Bloomberg Bitcoin Index.
Why it is special:
- Simplicity: Straight inverse exposure with broad distribution via U.S. brokers.
- Daily Hedging: Best for closing a long-BTC position in event of sudden dips.
| Previous Close | 20.90 |
|---|---|
| Bid | 20.48 x 3200 |
| Ask | 20.55 x 3000 |
| Volume | 1,079,561 |
| Avg. Volume | 1,629,150 |
| AUMAssets Under Management: The total market value of the investments that an ETF manages on behalf of investors. | $73.49 million |
| Expense RatioThe annual fee that an ETF charges its shareholders, expressed as a percentage of the fund's average assets. | 1.03% |
| Year-to-Date ReturnThe profit or loss of an investment from the beginning of the current calendar year up to the present day. | -9.76% |
| Start Date | June 21, 2022 |
Primary Benefit: BITI boasts the greatest assets and narrowest bid-ask spreads among inverse Bitcoin ETFs, providing greater liquidityThe ease with which an asset can be bought or sold in the market without affecting its price. and execution—crucial in hedging swiftly in surprise market action.
Also Read: Best ETF Investment Strategy for Growth & Risk Control
2. ProShares UltraShort Bitcoin Strategy ETF (SBIT)
What it does: Aims at –2x Bitcoin's daily movements.
Why it is different:
- A 3% decline in BTC would return around 6% returns, minus fees.
- Active Trading Play: Most appropriate for traders employing hard stop-loss rules.
| Data (5/8 2:31 PM) | Value |
|---|---|
| Close | 7.98 |
| Open | 7.99 |
| High | 7.99 |
| Low | 7.98 |
| Volume (current session) | 71,207 |
| Previous Close | 8.01 |
| Open (Previous?) | 7.74 |
| Bid | 7.70 x 27000 |
| Ask | 7.75 x 1400 |
| Day's Range | 7.61 - 7.84 |
| 52 Week Range | 7.61 - 55.10 |
| Volume (total?) | 6,964,148 |
| Avg. Volume | 6,727,440 |
| Net Assets | 57.42M |
| NAVNet Asset Value: The per-share value of an ETF, calculated by dividing the total value of its assets minus liabilities by the number of outstanding shares. | 7.99 |
| Yield | 1.31% |
| YTD Daily Total Return | -32.15% |
| Beta (5Y Monthly) | 0.00 |
| Expense Ratio (net) | 0.95 |
| AUMAssets Under Management: The total market value of the investments that an ETF manages on behalf of investors. | $56.55 million |
| Dividend Yield (shown) | 1.06% |
| Start Date | April 2, 2024 |
Key Point: With –2× leverage on daily Bitcoin volatilityThe degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns., SBIT is ideal for traders looking for more short-term negative exposure—ideal for sophisticated bets on big events.
3. HANetf 2x Short Bitcoin ETP (2SBT)
What it does: It offers –2x inverse on Bitcoin futures on a European exchange.
Why it stands out:
- Global Availability: For international investors with accounts in the United States, it provides a substitute for local products.
- Diversified Futures Collateral: Smoother roll performance in turbulent markets.
| Price (SEK) | 291,95 (-32,81 / -10,10%) |
|---|---|
| Volume | 33 |
| 52 Week Range (SEK) | 291,95 - 599,01 |
| Day Range (SEK) | 291,95 - 291,95 |
| AUMAssets Under Management: The total market value of the investments that an ETF manages on behalf of investors. | $0.3455 M |
| NAVNet Asset Value: The per-share value of an ETF, calculated by dividing the total value of its assets minus liabilities by the number of outstanding shares. (05 May 2025) | 345.4692 |
| Expense RatioThe annual fee that an ETF charges its shareholders, expressed as a percentage of the fund's average assets. | 1.19% |
| Start Date | 13th March, 2025 |
Key Driver: 2SBT is the first UCITSUndertakings for Collective Investment in Transferable Securities: A regulatory framework of the European Union for investment funds that can be marketed across Europe.-approved 2× inverse Bitcoin ETP in Europe, enabling global investors to gain short exposure with leverage and robust regulatory oversight.
Also Read: Aptus Value Housing Finance IPO GMP, Subscription & Analysis
4. REX Shares Bitcoin Strategy ETF (BTCZ)
What it does: It seeks a -2x inverse on large Bitcoin futures contracts.
Why it is unique:
- Swap-Based Structure: Possibly closer tracking during some down-days.
- Increasing Liquidity: Recent asset flows have enhanced trading spreads.
| AUMAssets Under Management: The total market value of the investments that an ETF manages on behalf of investors. | $5.05 million |
|---|---|
| Expense RatioThe annual fee that an ETF charges its shareholders, expressed as a percentage of the fund's average assets. | 0.95% |
| Dividend Yield (displayed) | 0.10% |
| AUM Growth (1 Y) | + $8.75 million |
Key Point: BTCZ's swap-based configuration can offer the more accurate tracking in the rapid declines, and it is thus preferred by those who need precision in volatile environments.
5. Direxion Daily Crypto Industry Bear 1X Shares (REKT)
What it does: Inverse –1x exposure to a diversified crypto industry index, overweight in companies focused on Bitcoin.
Why it is rare:
- Sector-Wide Hedge: Protects minersParticipants in a cryptocurrency network who validate and add transactions to the blockchain, typically earning rewards in the form of new cryptocurrency., exchangesPlatforms where users can buy, sell, and trade cryptocurrencies., and blockchainA distributed, immutable ledger that records transactions and tracks assets. service providers—not only the price of BTC.
| Previous Close | 24.40 |
|---|---|
| Open | 23.78 |
| Bid | 23.83 x 1000 |
| Ask | 27.49 x 2200 |
| Day's Range | 23.78 - 24.28 |
| 52 Week Range | 20.81 - 33.27 |
| Volume | 144 |
| Avg. Volume | 2,662 |
| Net Assets | 3.25M |
| NAVNet Asset Value: The per-share value of an ETF, calculated by dividing the total value of its assets minus liabilities by the number of outstanding shares. (08 May 2025) | $24.41 |
| YTD Daily Total Return | 2.89% |
| Beta (5Y Monthly) | 0.00 |
| Expense RatioThe annual fee that an ETF charges its shareholders, expressed as a percentage of the fund's average assets. (net) | 0.49% |
| AUMAssets Under Management: The total market value of the investments that an ETF manages on behalf of investors. | $3.22 M |
| Start Date | 17 July 2024 |
Principal Point: REKT tracks a broad spectrum of the crypto space—miners, exchanges, DeFiDecentralized Finance: Financial services built on blockchain technology that operate without traditional intermediaries.—and thus is the most diversified single-ticker play when negative sentiments hit the entire sector.
Developing an Inverse Tactical Plan
Set Your Timeframe
- Short holds (1–3 days) counteract path-dependencyThe phenomenon where the performance of a leveraged or inverse ETF over periods longer than one day can differ significantly from the simple multiple of the underlying asset's performance over that same period, due to daily rebalancing and compounding effects. Also known as path-dependency drag. drag.
- Exit before weekends or when funding ratesPeriodic payments exchanged between traders holding long and short positions in perpetual futures contracts, designed to keep the futures price close to the spot price. These can be a cost for short ETFs using futures. rise.
Size Your Bet
- Limit inverse investments to 10% or below of your total crypto assets.
- Treat every trade as an options contract: probability plays, not core holdings.
Stay Current
- Follow CPI reportsConsumer Price Index reports: A measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services., Fed minutesDetailed records of the Federal Reserve's Federal Open Market Committee (FOMC) meetings, providing insights into monetary policy discussions., and key on-chain metricsData extracted directly from a blockchain, such as transaction volume, active addresses, and hash rate, used to analyze cryptocurrency markets..
- Employ real-time notices (e.g., on TradingView, CoinMarketCap) to pick up sudden moves.
Join With Long Positions
- Dial up shorts when you think the uptrend has run out of steam, then switch back to longs when sentiment over-corrects.
- Consider a paired tradeA trading strategy that involves matching a long position with a short position in two related securities.: equal notional long-BTC and short-ETF for a market-neutral positionA strategy designed to profit from both increasing and decreasing prices in one or more markets, while attempting to avoid direct market risk..
Final Thoughts: Controlling Volatility with Inverse ETFs
Bitcoin's volatilityThe degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns. isn't disappearing—and you should maintain your risk management. Bitcoin Short ETFsExchange-Traded Funds designed to profit from a decrease in Bitcoin's price. enable you to:
- Make quick profits when market conditions are unfavorable.
- HedgeAn investment strategy to reduce the risk of adverse price movements in an asset. Core Holdings against sudden downturns.
- Diversify Strategies beyond pure long-only plays.
Start small: demo-trade one of the ETFs above, keep an eye on your P&LProfit and Loss: A financial statement summarizing the revenues, costs, and expenses incurred during a specific period, reflecting an investment's performance., and refine your entry/exit strategies. Over time, you'll have the confidence and data-driven smarts to apply inverse strategies with precision.
FAQ: Bitcoin Short ETF
A Bitcoin Short ETF utilizes futures or swap contracts to provide inverse returns on a daily basis for Bitcoin (e.g., -1×, -2×). It sets exposure daily in the morning, making it suitable for tactical, short-term plays rather than long-term holds.
Key Characteristics:
- Provides inverse returns (e.g., if Bitcoin drops 5%, a -1x ETF aims to rise 5%).
- Uses derivatives like futures or swaps.
- Daily rebalancing of exposure.
- Best for short-term, tactical trading.
It allows you to hedge your existing crypto or blockchain stock holdings against sudden market plunges. You can also potentially profit from downturns without dealing with margin calls or directly managing futures positions.
Primary Uses:
- Hedging: Protect existing long positions in cryptocurrencies or related equities.
- Speculation: Profit from anticipated price declines in Bitcoin.
- Simplified Shorting: Avoids complexities of margin accounts or direct futures trading for short exposure.
Consider purchasing when technical indicators (like an overbought RSI), macro catalysts, or extreme bullish sentiment suggest a potential downturn. These ETFs are typically targeted for 1–3 day trades around significant events such as Fed announcements, regulatory news, or when Bitcoin approaches strong chart resistance levels.
Potential Triggers & Indicators:
Note: The chart above illustrates conceptual indicators and their potential relative significance. Actual trading decisions require thorough analysis.
You can trade them like any stock if they are listed on major brokerages (e.g., Robinhood, Fidelity, Schwab, TD Ameritrade) using their ticker symbols. Similar Exchange Traded Products (ETPs) can also be found on European exchanges (e.g., Xetra, Euronext) accessible via global accounts.
Availability Example:
| Platform Type | Examples | Region |
|---|---|---|
| Major US Brokerages | Robinhood, Fidelity, Schwab, TD Ameritrade | USA |
| European Exchanges | Xetra, Euronext | Europe |
| Example Tickers (Illustrative) | BITI, SBIT (US); BTCS (Europe) | Varies |
Note: Availability and specific tickers vary by brokerage and region. Always check with your broker.
These products are suitable for:
- Traders who can actively monitor their positions daily and understand the impact of daily rebalancing, leverage decay (for leveraged ETFs), and funding rates (associated with futures).
- Individuals seeking a relatively simple, regulated tool to hedge against price volatility in crypto markets.
Considerations for Investors:
- Requires daily monitoring due to daily reset mechanism.
- Understanding of compounding effects and potential for "leverage decay" over longer periods, especially for leveraged (-2x, -3x) ETFs.
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