Why short (German) government bond futures?

Question

Today, mainly out of curiosity, I went to a major ETF comparison website and sorted the short ETFs by market value. I was surprised when among the first few places in the list I found an ETF (LYX0FW) on an index that tracks the 2x inversely leveraged futures on German 10y government bonds. I didn't know that such ETFs exist and in fact, as this question shows, it does not seem to be too widely known that one can short bonds or bond futures using ETFs.

Now, given the fact that the ETF I found is among the largest short ETFs that exist (even though all of those are of course much smaller than the largest long ETFs), I suppose that there is some good reason for people to buy it. My first impression is that it might be a good inflation protection - if inflation goes up and keeps rising for some while, then interest rates will rise as well, which means that bond futures fall and therefore the ETF that I found goes up. Considering the risk of the opposite development, it seems hard to imagine how interest rates should fall considerably below what they currently are, so it seems unlikely that the ETF goes down strongly.

Q1: What am I missing here? I surely must be missing some main points because I have never seen anyone advertise shorting bond futures as a measure to protect against rising inflation or even just against rising interest rates.

Independently of whether I am missing something in my reasoning, I'd like to ask

Q2: What are good reasons to buy a short ETF like LYX0FW?

Answer 1

Answer to Q2 first: I bet that if you were able to go back in time to when you asked this question and buy shares in LYX0FW you would. Why? See next answer.

Answer to Q1: Futures are derivative instruments that essentially allow you to profit from changes in the price of the underlying asset. If one is short a future, one gains when the price of the underlying asset goes down. The thing to know about bonds and interest rates is that there is a direct inverse relationship between the price of a bond and interest rates. So when, two years ago, as you wrote in your question,

"it seems hard to imagine how interest rates should fall considerably below what they currently are"

that indeed may have been the time for a directional bet that interest rates would eventually rise. According to justetf.com, if you would have bought in the day after you asked your question and sold yesterday, you would have pocketed a cool 42.61% return.