Inverse Bitcoin ETF: SBIT's −2x Daily Bet, 0.95% Fee

What is an inverse Bitcoin ETF?

An inverse Bitcoin ETF is a fund designed to move opposite to bitcoin's price for a single trading day. If bitcoin falls 3% in a session, a −1x fund aims to gain about 3% and a −2x fund about 6%, before fees. You buy it like any stock, so you get short exposure without a margin account, borrowing shares or a crypto exchange.

The two US funds from ProShares are the reference points:

SBIT launched in April 2024 alongside its long twin BITU (+2x). BITI has traded since June 2022, when CNBC reported it as the first US short bitcoin ETF. Neither fund sells bitcoin short; ProShares' fact sheet says SBIT gets its exposure through futures and swap agreements, and BITI's prospectus lists futures and swaps. Fee figures are from each fund's ProShares summary prospectus; BITI's total includes 0.06% of other expenses on top of its 0.95% management fee.

How does SBIT work?

SBIT resets its exposure every day. ProShares' prospectus is explicit that the fund seeks −2x the Bloomberg Bitcoin Index's return for a single day and does not seek that result over any longer period. After a day bitcoin falls, SBIT has gained, so it must add short exposure to stay at −2x tomorrow; after a day bitcoin rises, it must cut exposure.

That reset is why the multi-day result is not simply −2x bitcoin's move. Pre-Tick's leverage decay calculator uses the same arithmetic:

The pattern: in a choppy market the fund loses even when bitcoin ends flat, and in a clean trend down it can beat the naive −2x. Before fees, financing and tracking error, which all push the result lower.

Can you hold an inverse Bitcoin ETF long term?

ProShares designs SBIT and BITI for short holding periods and warns that results over longer periods can differ significantly from the target multiple. Three costs stack up for a buy-and-hold position:

• Volatility drag. Bitcoin's daily swings are large, and every reversal compounds against the fund, as in the table above.
• Fees. 0.95% for SBIT, about 1% for BITI, against 0.25% or less for spot funds such as IBIT.
• Bitcoin's long-run drift. An inverse fund is a bet against a rising asset; in the years bitcoin has risen, the short side has been the losing side.

There is also a hard floor. If bitcoin rose 50% in a single day, a −2x fund would lose 100%, which is why issuers reserve the right to close or reset such funds. The long-side version of all of this, including BITU and BITX, is in our leveraged Bitcoin strategies guide.

Should I use SBIT or BITI to hedge Bitcoin ETF holdings?

That depends on how long the hedge has to last and how much capital you want to tie up. Because SBIT is −2x, a position worth half your spot holding offsets a one-day move in it, but the hedge drifts every day as the two legs compound differently, so it needs resizing. BITI's −1x is simpler to size but still resets daily and costs more than SBIT. For a hedge measured in weeks, the drift and fees in both funds are the cost of the convenience. This is a description of how the products work, not a recommendation; spot flows, which have been mixed across Bitcoin funds this week, are in Bitcoin ETF flows this week.

What it means for investors

SBIT is the hardest Bitcoin fund on Pre-Tick's board to price before the bell. Over the 60 sessions from July 30 to October 22, Pre-Tick's pre-market estimate for SBIT missed the official open by a median 0.76%, against 0.15% for BITU and 0.07% for IBIT, and landed within ±0.5% on only 37% of sessions, per our accuracy page. Using the prior close instead would have missed by a median 2.02%, so the estimate still narrows the gap, but treat any SBIT pre-market number with wider bands than a spot fund's. For holding periods beyond a day, run the leverage decay calculator at −2x over 7, 30 or 90 days before sizing a position: it shows how often a daily-reset fund trailed the simple multiple across bitcoin's own price history. This is market analysis, not investment advice.