Share-split context: A reverse split was recorded on Nov 7, 2024 with coefficient 0.2. A reverse split combines multiple old shares into fewer new shares and mechanically raises the quoted price per share. That mechanical increase does not restore lost investment value. The returns in this report are already split-adjusted, while reverse-split history remains a separate structural warning.

ETF Education Report: ProShares Short Bitcoin ETF (BITI)

The ProShares Short Bitcoin ETF (BITI) is an inverse ETF designed to provide a return that moves in the opposite direction of Bitcoin. It is primarily used by investors who believe the price of Bitcoin will go down.

What this ETF is trying to do

BITI is an "inverse" fund. This means if the price of Bitcoin falls, this ETF is designed to increase in value. Conversely, if Bitcoin's price rises, this ETF is designed to lose value. It is a crypto-related fund that allows investors to bet against Bitcoin without owning the cryptocurrency itself.

What the numbers show

The performance of BITI varies significantly depending on the time frame:

• Year-to-Date (YTD): The price return is -23.78%, while the total return is -5.33%.

• One Year: The price return is 2.56%, but the total return is much higher at 27.87%.

• Three Year: The price return is -82.58%, and the total return is -77.26%.

It is important to note that BITI has a history of a reverse split. On November 7, 2024, a reverse split occurred with a coefficient of 0.2. In a reverse split, multiple old shares are combined into fewer new shares, which mechanically raises the quoted per-share price. This mechanical increase does not restore lost investment value.

Income and distribution explanation

BITI provides cash distributions, usually on a monthly basis. Over the last 12 months, it has made 12 payouts totaling 5.57 per share. The distribution yield is approximately 31.55%.

For new investors, it is important to remember that a high distribution yield alone can be misleading. It does not guarantee that the investor earned that percentage as a total return, nor does it guarantee the preservation of the original money invested.

NAV erosion explanation

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

Looking at price-based evidence, BITI has an erosion-risk score of 94, which is labeled as "Stable / sideways" with "good" severity. The severe erosion-risk flag is currently false.

Pros

• Inverse Exposure: Provides a way to profit from a decline in Bitcoin's price.

• High Distribution Yield: Offers a high percentage of cash distributions relative to the share price.

• Recent Total Return: The one-year total return (27.87%) is significantly higher than the one-year price return (2.56%).

Cons

• Long-term Price Decline: The three-year price return shows a significant drop of 82.58%.

• Inverse Risk: If Bitcoin prices rise, this ETF will likely lose value.

• Low Income Grade: It has an income rating grade of "D."

Beginner takeaway

BITI is a specialized tool for those who expect Bitcoin to fall. While it currently offers a high distribution yield, the long-term price history shows significant declines. Investors should distinguish between "price return" (the change in share price) and "total return" (which includes distributions).