The Proshares Ultrashort Bitcoin ETF has been impacted by a mix of geopolitical and regulatory developments surrounding Bitcoin. The Trump administration's announcement of plans to establish a national Bitcoin reserve has generated interest, suggesting a potential shift in U.S. policy towards cryptocurrencies. This move, coupled with efforts to create a clear legal framework for digital assets, could foster market growth. However, Bitcoin's price has faced downward pressure due to tightening USD liquidity, as noted by Arthur Hayes, chief investment officer at Maelstrom. The increase in the U.S. Treasury General Account's cash balance is contributing to this liquidity squeeze, which is typically unfavorable for cryptocurrencies. Additionally, the market is still processing the effects of recent mass liquidations, which saw $377 million in Bitcoin longs wiped out.
The Proshares Ultrashort Bitcoin ETF (SBIT) rose 1.89% to $10.26 as of 04:20 AM on Wednesday, February 5.