(Bloomberg) -- The first US Bitcoin-futures backed exchange-traded fund is turning into a target for crypto bears. 

Short interest in the $748 million ProShares Bitcoin Strategy ETF (ticker BITO) as a percentage of shares outstanding is nearly 11%, close to the highest since the fund’s October 2021 inception, IHS Markit Ltd. data show. Meanwhile, the fund’s ratio of open interest in bearish put contracts to call open interest has soared since mid-April to all-time highs.

That suggests that crypto bears are flocking to BITO as a way to short sell the token as they wait for the rollout of inverse Bitcoin ETFs, which would bet against it. Issuers such as Direxion, ProShares and AXS have filed applications for funds that would offer short exposure to Bitcoin futures contracts in the past few months, but none have launched yet. In the meantime, betting against BITO -- the first and largest US-listed Bitcoin derivatives ETF -- appears to be serving as a proxy.

“BITO is the first, it’s bigger and there’s more volume,” said Athanasios Psarofagis, Bloomberg Intelligence ETF analyst. “The other ones have been a bit of a flop.”

BITO has plunged nearly 37% so far in 2022, mirroring a fall in the world’s biggest cryptocurrency. The entire digital assets landscape has been pressured by ultra-hot inflation and tightening Federal Reserve policy. As a result, BITO is this year’s third worst-performing ETF in the US among non-leveraged funds, Bloomberg data show. 

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