An inverse bitcoin ETF is a financial product that provides the opposite returns of its underlying asset, bitcoin. If the price of bitcoin falls, the value of the ETF will rise.

How does an inverse spot bitcoin ETF work?

An inverse bitcoin ETF uses derivatives to move in the opposite direction of bitcoin's price. When the price of bitcoin goes down, the value of the ETF increases, and when the price of bitcoin goes up, the value of the ETF decreases. This allows investors to profit from declines in the price of bitcoin without needing to directly short-sell the asset.

Inverse ETFs are typically designed for short-term trading and may not perfectly track the inverse performance of bitcoin over longer periods due to factors like fees and tracking errors.

Inverse vs. regular spot bitcoin …