If an investor gets the timing of the oscillations right, they can make money at every point along the way, going long when the market goes up and short when it drops. However, it is also difficult to come across any reliable strategy that has thus far been able to predict which events influence the price of bitcoin to which extent. The initial calling off of the Segwit2x fork is a good example of that. Shortly after the news broke, the market appeared to be divided into two camps – those who saw less value because they would not receive the equivalent amount of their holdings in the new currency (“dividends”), and those who saw the news as a consolidation of bitcoin’s strength. The two camps pushed the price in opposite directions in a way that made it hard to predict which side would have the upper hand at which point in time.
  •   Theft, loss or destruction. Transacting on a blockchain depends in part specifically on the use of cryptographic keys that are required to access a user’s account (or “wallet”). The theft, loss or destruction of these keys impairs the value of ownership claims users have over the relevant assets being represented by the ledger (whether “smart contracts,” securities, currency or other digital assets). The theft, loss or destruction of private or public keys needed to transact on a blockchain could also adversely affect a blockchain company’s business or operations if it were dependent on the ledger.
Trustees, is of an adequate size to oversee the operations of the Trust, and that, in light of the small size of the Board, a complex Board leadership structure is not necessary or desirable. The relatively small size of the Board facilitates ready communication among the Board members, and between the Board and management, both at Board meetings and between meetings, further leading to the determination that a complex board structure is unnecessary. In view of the small size of the Board, the Board has concluded that designating one of the three Independent Trustees as the “lead Independent Trustee” would not be likely to meaningfully enhance the effectiveness of the Board. The Board reviews its leadership structure periodically and believes that its structure is appropriate to enable the Board to exercise its oversight of the Funds.

It’s reasonable to assume that a product named a future is attempting to predict the future. For Bitcoin futures, this is definitely not what they deliver. The core utility of the futures markets is not predicting the future prices of their product but rather the secure delivery of a product at a known price, quality, and date. If there’s product seasonality (e.g., specific harvest times) or foreseeable shortages/abundances then future’s prices may reflect that but neither of these factors applies to Bitcoin.
While the DJ Brookfield Global Infrastructure ETF and the Global Listed Private Equity ETF anticipate that, under normal market conditions, each Fund will invest primarily (i.e., at least 40% of its “assets” as defined above) in securities issued by issuers organized or located outside the United States (“foreign issuers”), to the extent that foreign issuers ever comprise less than 40% of such Fund’s assets for an extended period of time (i.e., six months), the Fund will take steps to: (i) either change its name; or (ii) change its benchmark.
The Board is currently composed of four Trustees, including three Independent Trustees who are not “interested persons” of the Funds, as that term is defined in the 1940 Act (each an “Independent Trustee”). In addition to four regularly scheduled meetings per year, the Board holds executive sessions (with and without employees of the Advisor), special meetings, and/or informal conference calls relating to specific matters that may require discussion or action prior to its next regular meeting. The Independent Trustees have retained “independent legal counsel” as the term is defined in the 1940 Act.
The equity markets are volatile, and the value of securities, swaps, futures, and other instruments correlated with the equity markets may fluctuate dramatically from day-to-day. Equity markets are subject to corporate, political, regulatory, market and economic developments, as well as developments that impact specific economic sectors, industries or segments of the market. Further, stocks in the Index may underperform other equity investments. Volatility in the markets and/or market developments may cause the value of an investment in the Fund to decrease.
The table below shows a performance example of a Short ProShares Fund that has an investment objective to correspond to the inverse (-1x) of the daily performance of an index. In the chart below, areas shaded lighter represent those scenarios where a Short ProShares Fund will return the same or outperform (i.e., return more than) the index performance; conversely, areas shaded darker represent those scenarios where a Short ProShares Fund will underperform (i.e., return less than) the index performance.
Equity/Index Swaps. In an equity swap, payments on one or both sides are linked to the performance of equities or an equity index. Equity swaps are normally used to (1) initiate and maintain long or short equity exposures either in an index or a specific stock portfolio; (2) temporarily eliminate exposure to an equity portfolio without disturbing the underlying equity position; or (3) increase, reduce, or eliminate market exposure to a single issue or a narrow stock portfolio or obtain greater diversification for a limited period of time without disturbing an underlying position.
Well since then bitcoin is up more than 50 percent; it reached a record of $19,511 early Monday, hours after CME launched its futures contract. "Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts," is the Bloomberg headline about Sunday's start of trading on CME. On the other hand, bitcoin was actually down a bit on the first full day of CME trading yesterday, and fell further overnight; "Bitcoin Futures Prices Fall in CME Debut" is the Wall Street Journal headline about Monday's trading. It is of course still very early days for the futures, and it's still possible that the shorts will come in and drive the price down. I guess it's even possible bitcoin bulls and bears will both flock to the futures market and trade with each other to find an efficient and stable price that reflects bitcoin's fundamental value, whatever that is.
The Bitcoin Network is currently maintained by Bitcoin Core and no single entity owns the Bitcoin Network (see “Description of Bitcoin and the Bitcoin Network—The Bitcoin Network”). However, third parties may still assert intellectual property rights claims relating to the operation of the Bitcoin Network. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in the Bitcoin Network’s long-term viability or the ability of end-users to hold and transfer bitcoin may adversely affect the price of bitcoin and adversely affect the Bitcoin Instruments. Additionally, a meritorious intellectual property rights claim could prevent end-users from accessing the Bitcoin Network or holding or transferring their bitcoin, which could adversely affect the value of the Bitcoin Instruments. As a result, an intellectual property rights claim against Bitcoin Network participants could have a material adverse impact on the Funds.
The Index Receipt Agent makes available through the NSCC on each Business Day, either immediately prior to the opening of business on the Exchange or the night before, the list of the names and the required number of shares of each Deposit Security to be included in the current Portfolio Deposit (based on information at the end of the previous Business Day) for each applicable Fund. Such Portfolio Deposit is applicable, subject to any adjustments as described below, in order to effect purchases of Creation Units of Shares of such Fund until the next-announced Portfolio Deposit composition is made available.
The dates for the period October 1, 2017 through September 30, 2018 in which the regular holidays affecting the relevant securities markets of the below listed countries. Please note these holiday schedules are subject to potential changes in the relevant securities markets. In certain countries (for example, China) some exchanges may have holidays not found in the other exchanges.
Individual shares of the Fund will be listed for trading on [the Exchange] and can be bought and sold in the secondary market at market prices. The market price of shares will fluctuate in response to changes in the value of the Fund’s holdings, supply and demand for shares, and other market factors. ProShare Advisors cannot predict whether the Fund’s shares will trade above, below or at a price equal to the value of the Fund’s holdings. Differences between secondary market prices and NAV, the value of the Fund’s holdings, may be due largely to supply and demand forces in the secondary market, which may not be the same forces as those influencing prices for securities or financial instruments held by the Fund at a particular time. Given the fact that the Fund’s shares can be created and redeemed in Creation Units, ProShare Advisors believes that large discounts or premiums to the value of the Fund’s holdings should not be sustained.
Crypto Facilities and the CME Group  have been calculating and publishing the Bitcoin Reference Rate (BRR) since November 2016. Such an official rate is a prerequisite of options trading in the traditional markets. The BRR is calculated based on the rates from the biggest exchanges: Bitstamp, GDAX, itBit, and Kraken. More concretely, it is calculated based on all Bitcoin vs. USD trades on the participating exchanges between 3 and 4 p.m. London time. To calculate the BRR, the hour between 3 and 4 is divided into 12 intervals of 5 minutes. For each interval, the volume-weighted median of the Bitcoin price is calculated (statistically, the median, in contrast to the average, prevents single outliers from distorting the price). The BRR is then the average of these 12 median values. More details about the calculation of the BRR can be found in the BRR whitepaper.

The Guidelines are maintained and implemented by ISS and are an extensive list of common proxy voting issues with recommended voting actions based on the overall goal of achieving maximum shareholder value and protection of shareholder interests. Generally, proxies are voted in accordance with the voting recommendations contained in the Guidelines. If necessary, the Advisor will be consulted by ISS on non-routine issues. Proxy issues identified in the Guidelines include but are not limited to:
ProShare Advisors, pursuant to a separate Management Services Agreement, performs certain administrative services on behalf of the Funds, such as negotiating, coordinating and implementing the Trust’s contractual obligations with the Funds’ service providers; monitoring, overseeing and reviewing the performance of such service providers to ensure adherence to applicable contractual obligations; and preparing or coordinating reports and presentations to the Board of Trustees with respect to such service providers as requested or as deemed necessary. For these services, the Trust pays to ProShare Advisors a fee at the annual rate of 0.10% of average daily net assets for each of the Funds. ProShare Advisors has entered into an Advisory and Management Services Fee Waiver Agreement that waives this management services fee for the Morningstar Alternatives Solution ETF through at least October 31, 2018. Prior to this date, ProShare Advisors may not terminate the arrangement without the approval of the Board.
If an investor gets the timing of the oscillations right, they can make money at every point along the way, going long when the market goes up and short when it drops. However, it is also difficult to come across any reliable strategy that has thus far been able to predict which events influence the price of bitcoin to which extent. The initial calling off of the Segwit2x fork is a good example of that. Shortly after the news broke, the market appeared to be divided into two camps – those who saw less value because they would not receive the equivalent amount of their holdings in the new currency (“dividends”), and those who saw the news as a consolidation of bitcoin’s strength. The two camps pushed the price in opposite directions in a way that made it hard to predict which side would have the upper hand at which point in time.
Each Fund may be required to withhold federal income tax (“backup withholding”) from dividends and capital gains distributions paid to shareholders. Federal tax will be withheld if (1) the shareholder fails to furnish the Fund with the shareholder’s correct taxpayer identification number or social security number, (2) the IRS notifies the shareholder or the Fund that the shareholder has failed to report properly certain interest and dividend income to the IRS and to respond to notices to that effect, or (3) when required to do so, the shareholder fails to certify to the Fund that he or she is not subject to backup withholding. The backup withholding rate is 28%. Any amounts withheld under the backup withholding rules may be credited against the shareholder’s federal income tax liability.
Floating and variable rate notes generally are unsecured obligations issued by financial institutions and other entities. They typically have a stated maturity of more than one year and an interest rate that changes either at specific intervals or whenever a benchmark rate changes. The effective maturity of each floating or variable rate note in a Fund’s portfolio will be based on these periodic adjustments. The interest rate adjustments are designed to help stabilize the note’s price. While this feature helps protect against a decline in the note’s market price when interest rates rise, it lowers a Fund’s income when interest rates fall. Of course, a Fund’s income from its floating and variable rate investments also may increase if interest rates rise.
NYSs (or “direct shares”) are foreign stocks denominated in U.S. dollars and traded on American exchanges without being converted into ADRs. These stocks come from countries that do not restrict the trading of their stocks on other nations’ exchanges. Each Fund may also invest in ordinary shares of foreign issuers traded directly on U.S. exchanges.
The Trust’s website has information about the premiums and discounts for each Fund. Premiums or discounts are the differences between the NAV and market price of a Fund on a given day, generally at the time NAV is calculated. A premium is the amount that a Fund is trading above the NAV. A discount is the amount that the Fund is trading below the NAV.
If I held the opinion that an asset was going to go one way, but then made the research and it turned out that I started thinking it might actually be headed the other way, I should feel no obligation to hold on to my original opinion, just because I didnt want to feel I’ve been initially wrong. This seems obvious but is much tougher in practice for inexperienced investors.
Yes but ... in cryptocurrencies? If you had borrowed 100 bitcoins to finance your working capital needs a year ago, you'd have financed about $79,000 worth of working capital. If you had to pay back 112 bitcoins today, that would come to a bit over $2 million, a dollar interest rate of over 2,400 percent. (If you'd borrowed ether you'd be paying over 12,000 percent.) Unless your working capital was bitcoin, you will not be able to pay back that loan. The lesson here is: Probably don't borrow an asset caught in a massive speculative frenzy to fund your working capital needs.

Each Fund may consider changing its index at any time, including if, for example: the current index becomes unavailable; the Board believes that the current index no longer serves the investment needs of a majority of shareholders or that another index may better serve their needs; or the financial or economic environment makes it difficult for the Fund’s investment results to correspond sufficiently to its current index. If believed appropriate, a Fund may specify an index for itself that is “leveraged” or proprietary. There can be no assurance that a Fund will achieve its objective.
Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Historical performance is not indicative of future results. Current data may differ from data quoted. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
This Statement of Additional Information (“SAI”) is not a prospectus. It should be read in conjunction with the Prospectus of ProShares Trust (the “Trust”), dated October 1, 2017, the Prospectus dated November 16, 2017 for ProShares Decline of the Retail Store ETF, the Prospectus dated November 16, 2017 for ProShares Long Online/Short Stores ETF, the Prospectus dated             , 2018 for ProShares Bitcoin Futures Strategy ETF, the Prospectus dated             , 2018 for ProShares Short Bitcoin Futures Strategy ETF, the Prospectus dated             , 2018 for ProShares Blockchain/Bitcoin Strategy ETF, and the Prospectus dated             , 2018 for ProShares Bitcoin Futures/Equity Strategy ETF each as may be amended or supplemented, each of which incorporates this SAI by reference. A copy of the Prospectuses and a copy of the Annual Report to shareholders for the Funds that have completed a fiscal year are available, without charge, upon request to the address above, by telephone at the number above, or on the Trust’s website at www.ProShares.com. The Financial Statements and Notes contained in the Annual Report to Shareholders for the fiscal year ended May 31, 2017 are incorporated by reference into and are deemed part of this SAI. The principal U.S. national stock exchange on which all Funds (except those noted below) identified in this SAI are listed is NYSE Arca. The S&P MidCap 400 Dividend Aristocrats ETF, the Russell 2000 Dividend Growers ETF, the ProShares MSCI Emerging Markets Dividend Growers ETF, the ProShares S&P 500 Dividend Aristocrats ETF, the ProShares MSCI EAFE Dividend Growers ETF, the MSCI Europe Dividend Growers ETF, the Morningstar Alternatives Solution ETF, the Global Listed Private Equity ETF, the Large Cap Core Plus, the High Yield—Interest Rate Hedged, the Investment Grade—Interest Rate Hedged, the Short Term USD Emerging Markets Bond ETF, the ProShares Managed Futures Strategy ETF, the Merger ETF, K-1 Free Crude Oil Strategy ETF and the CDS Short North American HY Credit ETF are listed on the Bats BZX Exchange, Inc. The UltraPro Short QQQ®, the UltraShort Nasdaq Biotechnology, the UltraPro Short Nasdaq Biotechnology, the UltraPro QQQ®, the Ultra Nasdaq Biotechnology the UltraPro Nasdaq Biotechnology and the Equities for Rising Rates ETF are listed on The NASDAQ Stock Market.

Example: If the futures contract price is $400, then you can buy 0.5btc worth of this and if the price of bitcoin goes up to $450 the futures contract price will go up, and the value increases from 0.5 BTC and you can just sell for a profit. Trading a synthetic derivative rather than spot bitcoin allows you to use margin leverage to more easily buy and sell -- the contracts are just a facilitation of the value.
Over the past several years, a number of Bitcoin Exchanges have been closed due to fraud, failure, security breaches or governmental regulations. The nature of the assets held at Bitcoin Exchanges make them appealing targets for hackers and a number of Bitcoin Exchanges have been victims of cybercrimes. In many of these instances, the customers of such Bitcoin Exchanges were not compensated or made whole for the partial or complete losses of their account balances in such Bitcoin Exchanges. No Bitcoin Exchange is immune from these risks but the existence of these risks has created a higher barrier of entry for new Bitcoin Exchanges. The loss of confidence in new and smaller Bitcoin Exchanges and in the Bitcoin Exchange Market overall can slow down the mass adoption of bitcoin. Further, the failure of the Bitcoin Exchange Market or any other major component of the overall bitcoin ecosystem can have consequences for the Bitcoin Network, have an adverse effect on the price of bitcoin and could have a negative impact on the Bitcoin Instruments in which certain of the Funds invest.
"We expect that the futures exchanges, through information sharing agreements, will be monitoring the trading activity on the relevant cash platforms for potential impacts on the futures contracts' price discovery process," CFTC Chair J. Christopher Giancarlo said in an official statement. "This includes potential market manipulation and market dislocations due to flash rallies and crashes and trading outages."
When a Fund purchases a put or call option on a futures contract, the Fund pays a premium for the right to sell or purchase the underlying futures contract for a specified price upon exercise at any time during the option period. By writing (selling) a put or call option on a futures contract, a Fund receives a premium in return for granting to the purchaser of the option the right to sell to or buy from the Fund the underlying futures contract for a specified price upon exercise at any time during the option period.
fluctuations in the value of the foreign currency between the acquisition and disposition of the position also are treated as ordinary income or loss. In certain circumstances, a Fund may elect to treat foreign currency gain or loss attributable to a forward contract, a futures contract or an option as capital gain or loss. Furthermore, foreign currency gain or loss arising from certain types of section 1256 contracts is treated as capital gain or loss, although a Fund may elect to treat foreign currency gain or loss from such contracts as ordinary in character. These gains and losses, referred to under the Code as “section 988” gains or losses, increase or decrease the amount of a Fund’s investment company taxable income available (and required) to be distributed to its shareholders as ordinary income. If a Fund’s section 988 losses exceed other investment company taxable income during a taxable year, the Fund would not be able to make any ordinary dividend distributions, or distributions made before the losses were realized would be recharacterized as a return of capital to shareholders, rather than as ordinary dividends, thereby reducing each shareholder’s basis in his or her Fund Shares.

Localbitcoins is the portal that exchanges trades between person to person where you interact with the seller directly. On this platform, people from different countries can exchange their local currency to bitcoins. The site is suggested for casual traders seeking more privacy. The site uses an escrow system and the transfer of bitcoin is made after funds are received in the sellers account. Registering, buying and selling is completely free on localbitcoins while local bitcoin users who create advertisements charges 1% fee for every completed trade.
If the price drops to $500, you earn 11.73 BTC on the position and have 20.06 BTC left, which at $500 per BTC is worth $10,000! This is a simple example just to show you, even if you're a small bitcoin holder, bitcoin futures are a valuable risk management tool. You could have performed this "hedge" at 50x leverage by putting down just 8.33/50= 0.17 BTC worth of margin!
To illustrate the point, recall that futures markets are just counterparty contracts. Let's say I want to SHORT the market and profit off a decline in BTC/USD. If I put an order to sell Weekly futures contract at $400, and someone buys that offer, then we have created a futures contract. If it goes down, I profit and he loses, if it goes up, he profits and I lose. However, what if price goes down really fast, and my counterparty only had a little margin backing his position? Well, he gets margin-called when it goes down enough, and the system takes his contract and forces it to be sold to a different counterparty that wants to take the LONG side of my contract.
Creation Units of all Funds may, at the discretion of the Advisor, be sold for cash (the “Cash Purchase Amount”). Creation Units are sold at their NAV plus a Transaction Fee, as described below. The Advisor may also restrict purchases of Creation Units to be on a cash-only basis at any time and without prior notice, in all cases at the Advisor’s discretion.
eToro is a social trading and multi-asset brokerage platform with offices in Cyprus, Israel and the United Kingdom. The platform allows users to watch trading strategies of others and copy them. The company’s products OpenBook and WebTraders allow traders to learn from each other. The features are user-friendly and simple to use while the fees depend on market dynamics.
and the FTSE Developed Europe Index (the “Indices”) (ii) the figure at which an Index is said to stand at any particular time on any particular day or otherwise, or (iii) the suitability of the Index for the purpose to which it is being put in connection with the ProShares Ultra, Short and UltraShort FTSE China 50 and Ultra and UltraShort FTSE Developed Europe. None of the Licensor Parties have provided or will provide any financial or investment advice or recommendation in relation to the Index to ProShares or its clients. The Index is calculated by FTSE or its agent. None of the Licensor Parties shall be (a) liable (whether in negligence or otherwise) to any person for any error in the Index and (b) under any obligation to advise any person of any error therein.

The Board of Trustees of the Trust reserves the right to declare a split or a consolidation in the number of Shares outstanding of any Fund, and may make a corresponding change in the number of Shares constituting a Creation Unit, in the event that the per Share price in the secondary market rises (or declines) to an amount that falls outside the range deemed desirable by the Board.
Kraken’s innovative features claim to cater to the demand of fast execution, outstanding support and high security. The organisation is based in San Francisco, USA. Kraken is operational worldwide with a pre-validation for those countries where it is not eligible. The platform accepts both Cryptocurrency and fiat and transaction is completed by a wire transfer which should be completed at the bank. The platform does not accept debit, credit or cash.
BitMEX also has a weekly rebalancing for all their contracts, but currently their most popular product is the Daily 100x maximum leverage contract. This settles daily, but otherwise the rest of the contracts are handled on Friday, a little bit after OKCoin's 8:00AM UTC. See this website to get a countdown to the settlements on the different exchanges. The policies of exchanges are changing often so this information may be outdated by the time you read it (though we will try to keep it as up to date as possible).
risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. If such a default occurs, a Fund will have contractual remedies pursuant to the swap agreements, but such remedies may be subject to bankruptcy and insolvency laws that could affect the Fund’s right as a creditor. The counterparty risk for cleared swaps is generally lower than for uncleared over-the-counter swaps because generally a clearing organization becomes substituted for each counterparty to a cleared swap agreement and, in effect, guarantees the parties’ performance under the contract as each party to a trade looks only to the clearing organization for performance of financial obligations. However, there can be no assurance that the clearing organization, or its members, will satisfy its obligations to a Fund. Upon entering into a cleared swap, a Fund may be required to deposit with the broker an amount of cash or cash equivalents in the range of approximately 3% to 6% of the notional amount for CDS on high yield debt issuers and 1% to 5% for CDS on investment grade debt issuers (this amount is subject to change by the clearing organization that clears the trade). This amount, known as “initial margin,” is in the nature of a performance bond or good faith deposit on the cleared swap and is returned to a Fund upon termination of the swap, assuming all contractual obligations have been satisfied. Subsequent payments, known as “variation margin” to and from the broker will be made daily as the price of the swap fluctuates, making the long and short position in the swap contract more or less valuable, a process known as “marking-to-market.” The premium (discount) payments are built into the daily price of the swap and thus are amortized through the variation margin. The variation margin payment also includes the daily portion of the periodic payment stream.
  •   A new competing digital asset may pose a challenge to bitcoin’s current market dominance, resulting in a reduction in demand for bitcoin, which could have a negative impact on the price of bitcoin. It is possible that other digital currencies and trading systems could become more widely accepted and used than Bitcoin. The rise of such currencies could lead to a reduction in demand for bitcoin, which could have a negative impact on the price of bitcoin.
As for why you should buy a put option instead of the asset itself, the answer is simple. By buying the asset itself, you can never profit from falling prices. With put options you can, simply because their value rises as the price of the underlying stock is falling. In addition to this feature, they offer the same kind of potential for leverage that calls options do, as described above. The price of put options is calculated in a similar manner, but with the important difference being that the intrinsic value is calculated as a predetermined price of the option minus the current market price of the asset – not the other way round as is the case for call options.
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