Defiance announced on Thursday the launch of the Defiance Daily Short Digitizing the Economy ETF IBIT, which offers exposure to companies in the crypto and blockchain ecosystems.
What Happened: Defiance ETF CEO and Chief Investment Officer Sylvia Jablonski said she remained highly bullish on the growth of crypto and the digital asset ecosystem over the next few years.
“However, given the recent onset of the crypto winter — the flood of layoffs and revenue losses — we believe shorting positions such as Coinbase, Galaxy and Robinhood, along with those involved in the metaverse, like Meta and Roblox, will provide downside protection in the current environment,” she said.
Over the past two years, more than a dozen cryptocurrency-related ETFs have been introduced, seeking to track anything from the metaverse to Bitcoin BTC/USD miners to multiple blockchains. Defiance ETFs are thematic exchange-traded funds.
Why It Matters: Almost perfect correlations revealed that attempts at differentiation were largely fruitless.
According to statistics provided by Bloomberg, the largest of these funds, the $572 million Amplify Transformational Data Sharing ETF BLOK, has a correlation of 0.9 or higher with 14 of the 18 other U.S.-listed crypto-themed ETFs.
A correlation of 1 indicates complete harmony.
A 21-day correlation coefficient of 0.91 exists between the $489 million Roundhill Ball Metaverse ETF METV, which seeks exposure to the developing digital world, and Amplify Transformational Data Sharing ETF, which owns blockchain-focused firms.
Photo: Gerd Altmann via Pixabay
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