This ETF tracks the daily performance of the Bloomberg Galaxy Bitcoin Index at inverse 2x (-2x). It aims to deliver twice the return on a daily basis when the price of Bitcoin falls, building its exposure through derivatives such as swaps.

It suits short-term and tactical investors who want to bet on a short-term decline in Bitcoin or temporarily hedge an existing position.

It is an actively managed ETF operated by ProShares.

The fund tracks twice the daily performance of the underlying index that follows Bitcoin's price, in the opposite direction. It builds its exposure with derivatives such as swaps and readjusts its positions every day to maintain the target multiple. Because of the daily reset structure, the longer the holding period, the more compounding causes a gap to open up versus simple cumulative returns.

• Inverse 2x exposure that bets on a decline in Bitcoin
• A derivative-based hedging tool that can be traded in a regular brokerage account

Assets under management (AUM) stand at $111.0M, and the expense ratio is 0.95% per year.

Because of the daily reset structure, in periods of high volatility the longer the holding period, the wider the gap can become versus the cumulative return of the underlying asset.

Because it moves opposite to the price of Bitcoin, it performs well when the crypto market is weak and losses widen in a bull market. Owing to its leveraged nature, its daily swings are larger than those of the underlying asset.

Money tends to flow in for short-term hedging and bearish bets when crypto market volatility rises, and the fund's capital is more short-term trading money than long-term holdings.

The ability to bet on a Bitcoin decline at twice the magnitude is a strength, but volatility and compounding losses stemming from the daily reset and leverage are the key drawbacks.

BITI, shown in the table, is a lower-multiple alternative from the same issuer that tracks Bitcoin at inverse 1x. ETHD and SETH apply the same inverse structure to Ethereum, and BTCZ is a product from a different issuer that tracks Bitcoin at inverse 2x. To make a leveraged bet in the opposite direction, on a rise in Bitcoin, you can also consider products such as BITX.

Here are the points to review before investing in SBIT. With leveraged inverse products, it is important to fully understand the daily reset structure and compounding effect and to approach them on the premise of short-term use.

If Bitcoin rises, losses widen to twice the magnitude, and because of the daily reset structure, holding through a highly volatile stretch for a long time can erode value regardless of the underlying asset's trend. A short-term holding premise is essential.

It is a tactical tool to be used only for short-term bets on a Bitcoin decline or for hedging existing holdings. It is better suited to investors with a clear short-term view and stop-loss criteria than to long-term holders.