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Wednesday, August 31, 2022

Bitcoin tumbles amid filing for ETF that would bet against it

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The price of bitcoin fell Wednesday morning amid a filing for a new exchange traded fund that will bet against the price of the cryptocurrency.

Bitcoin was down almost 7 percent at $58,475 per coin Wednesday morning, down more than 12 percent from its all-time high of just over $66,900 reached last week.

Ethereum was also down more than 5 percent from its price 24 hours ago while Binance Coin was down more than 7 percent. Cardano was exchanging hands Wednesday morning more than 8 percent lower.

The price drops came after Direxion filed for a new bitcoin ETF that would bet against the future price of the crypto.

It will be called the Direxion Bitcoin Strategy Bear ETF, according to its filing with the Securities and Exchange Commission.

The application comes just a week after the SEC allowed the first bitcoin futures ETF, the ProShares Bitcoin Strategy ETF, to begin trading.

The approval of that ETF helped send the price of bitcoin to its latest all-time high as analysts said the new ETF would help broaden investor exposure to cryptocurrencies and make the sector more mainstream.

Bitcoin price
The price of bitcoin has tumbled of late.

The latest crypto price drops also came after commission-free trading app Robinhood reported lackluster earnings that showed a major drop in cryptocurrency trading.

Shares of Robinhood tanked almost 10 percent after the Tuesday evening third-quarter earnings report showed the company made just $51 million from crypto trades in the quarter, down almost 80 percent from firm’s record $233 million in crypto trading revenue in the prior quarter.

Robinhood’s surge in crypto revenue earlier this year was driven largely by the spike in interest in so-called memecoin Dogecoin. Trades of the Elon Musk-favored coin made up more than 25 percent of Robinhood’s revenue in the second quarter.

Bitcoin was down almost 7 percent at $58,475 per coin Wednesday morning.
REUTERS/Dado Ruvic/Illustration/File Photo

Robinhood had previously warned that it expected interest in trading to decline in the most recent quarter after the frenzy in GameStop trading earlier this year sucked people into the stock market.

The company had also warned investors that if interest in Dogecoin specifically waned, the company’s operations would be hurt.

The price of Dogecoin was down almost 11 percent Wednesday morning compared with a day earlier.

Bucking the trend, fellow dog-themed cryptocurrency Shiba Inu Coin soared more than 18 percent Wednesday morning over the past 24 hours. It’s up almost 700 percent from a month ago.


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