Today, ProShares is launching the first U.S. listed exchange-traded fund (ETF) that lets investors bet against Bitcoin — to be listed on the New York Stock Exchange under the tickerBITI

. But don’t take this as a cause for a celebration…

Late arrival: ETF issuers haven’t had the best track record with industry-specific thematic ETFs. ProShares launched a futures-based Bitcoin ETF and a metaverse-related ETF this year just asBTC

peaked and the metaverse went out of favor.

• The ProShares Bitcoin Strategy ETF (NYSE:BITO) — a futures-based bitcoin ETF — is down 67% since its October launch.
• The ProShares Metaverse ETF (NYSE:VERS) — which tracks a basket of assets related to the metaverse — is down over 28% since its March launch.

ETFs take a long time to get approved from inception to launch, and stocks in the ETF can get stale fast. In 2019, ETF approvals took a median of 221 days, while complex ETFs can take even longer.

Data says: A 2021 research report analyzed 526 specialized ETFs and their returns between 1993 and 2019, and here are their findings:

• Returns: The price of these ETFs rises in the years before the ETF launch just to realize an average negative 6% annual return in the first five years.
• But why? The research says lower performance can result from higher fees, the ETF launching when assets in the ETF are at their peaks and are less diversified than major ETFs.

Thematic ETFs tend to have higher fees than ETFs that track broader indexes. The ProShares Bitcoin ETF has a 0.95% fee while the SPDR S&P 500 ETF Trust (NYSE:SPY) has a 0.095% fee. For $1,000 invested in both, that’s $9.50 vs. 95 cents in annual fees paid — which adds up fast over the years.

And now, ProShares is about to launch an inverse Bitcoin ETF with Bitcoin already down nearly 70% from its peak.