Prominent U.S.-based Exchange Traded Fund (ETF) provider, ProShares, has recently introduced a new short Ether (ETH) product.
The newly launched ETF, named the ProShares Short Ether Strategy ETF and identified by the ticker $SETH, offers investors the opportunity to profit from a decline in the price of Ether.
Ether is the native cryptocurrency fueling the Ethereum blockchain, known for its smart-contract capabilities and its dominant position in the Decentralized Finance (DeFi), Non-fungible Token (NFT), and broader web3 industries.
$SETH is set to be traded on the New York Stock Exchange and is designed to achieve the opposite performance of its underlying benchmark asset, which is the Standard & Poor’s CME Ether Futures Index.
Looking ahead, traders should monitor the influx of investor capital into ProShares’ new short ETH ETF product, as an uptick in flows might signal heightened bearish sentiment towards Ether.
It’s essential to note that an increase in capital inflows into short ETH ETF products could also be interpreted as a sign of institutional adoption of Ether. Investors may not exclusively purchase short Ether products to express a bearish stance on the cryptocurrency. Instead, they might acquire them for hedging purposes or to implement delta-neutral investment strategies, capitalizing on Ether’s inherent yield when utilized for staking.
Where Next for Ether (ETH)?
As of the latest update, Ether (ETH) is trading nearly flat on the day, just above $1,800 per token, maintaining a position above its 200-day moving average (DMA) at $1,776. This comes as traders assess the recent US jobs report, which displayed weakness across the board, supporting equity and bond prices.
Although ETH is currently around 4% lower compared to the multi-month highs reached earlier in the week, it remains nearly 20% higher than its October lows, slightly above $1,500. The October surge was in sync with the broader crypto market, driven by optimism about potential near-term approvals for spot Bitcoin ETFs.
The ongoing optimism surrounding institutional adoption appears to persist, and the broader macroeconomic environment is providing tailwinds, marked by stock market rallies and substantial declines in US bond yields this week. This follows the latest updates from the Federal Reserve and the US job market.
Ether’s potential for a rally to yearly highs above $2,000 hinges on breaking north of a downtrend connecting this year’s highs. However, challenges include recent news that Render Network, a major web3 decentralized application, is moving from Ethereum to Solana. Additionally, on-chain activity for ETH has been relatively weak recently, serving as headwinds for its price.