ProShares, a prominent US-based Exchange Traded Fund (ETF) provider, has recently introduced a new short Ether (ETH) product.
This new ETF is named the ProShares Short Ether Strategy ETF and is identified by the ticker symbol $SETH. It offers investors an opportunity to profit when the price of Ether experiences a decline.
Ether is the native cryptocurrency that fuels the Ethereum blockchain, renowned for its smart contract capabilities and widespread use in the Decentralized Finance (DeFi), Non-fungible Token (NFT), and the broader web3 industry.
The $SETH ETF is listed on the New York Stock Exchange and aims to deliver the inverse performance of its underlying benchmark asset, which is the Standard & Poor’s CME Ether Futures Index. In other words, as the value of Ether drops, this ETF provides investors with the means to profit from that decline.
In the coming days, traders should closely monitor the amount of investor capital flowing into ProShares’ new short ETH ETF product. An uptick in capital inflow could signal an increasing bearish sentiment towards Ether.
However, it’s important to note that a surge in capital inflows into short ETH ETF products might also indicate institutional adoption of Ether. This is because investors might not solely purchase short Ether products to express a negative outlook on the cryptocurrency.
Instead, they may acquire such products for various purposes, such as hedging against price fluctuations or pursuing delta-neutral investment strategies to leverage Ether’s inherent yield when utilized for staking. In this context, the inflow of capital into short ETH ETFs could serve multiple purposes beyond simply betting against Ether’s price.
Where Next for Ether (ETH)?
Ether (ETH) was recently trading nearly flat on the day, just above the $1,800 per token mark. It remained slightly above its 200-day moving average (DMA) at $1,776. This stability comes as traders analyze the latest US jobs report, which displayed weakness across various aspects, consequently bolstering equity and bond prices.
While ETH is currently trading about 4% lower compared to the multi-month highs it reached earlier in the week, it still maintains a nearly 20% gain over its October lows, which were slightly above $1,500. This surge occurred in late October, aligning with the broader crypto market’s optimism regarding the potential approval of spot Bitcoin ETFs in the near term.
The positive outlook regarding institutional adoption is expected to persist, and the broader macroeconomic context appears to be supporting this trend. Stocks are rallying, and US bond yields have seen a substantial decline this week as traders digest the latest information from the Federal Reserve and the US job market.
If Ether manages to break out of the downtrend that connects this year’s highs, it stands a good chance of rallying back to yearly highs exceeding $2,000.
Nonetheless, recent developments such as the news of a major web3 decentralized application, Render Network, moving from Ethereum to Solana, along with a recent decline in on-chain activity, present challenges for the price of ETH.