Defiance Launches Crypto ETF That Tracks NFT Firms Like Coinbase

Crypto asset company Defiance is launching an NFT ETF, per Bloomberg. 

The Defiance Digital Revolution ETF—NFTZ—will track blockchain and NFT-related industries.

The fund is “a great way for investors to gain access to not only the fast-growth blockchain technology aspect of the digital world, but companies involved in the renaissance of NFTs,” Sylvia Jablonski, CIO for Defiance ETFs said. 

“The companies in this index are key players in the build-out of Web 3,” Jablonski added. 

What’s in the NFT fund?

The NFTZ fund’s chief selling point is that it tracks firms exposed to the blockchain and NFT market. 

At the time of writing, the fund’s top positions are populated by a who’s who list of prominent crypto companies, including Coinbase, Silvergate Capital, and Bitfarms—one of the most well-known mining companies in crypto. 

Though Coinbase has been a key player in the industry as an exchange, the San Francisco-based firm has also entered the NFT sector as of October this year. Shortly after announcing Coinbase NFT, the company’s new platform, it saw a spike of 1.4 million sign-ups in less than 48 hours. 

Jablonski is particularly bullish on NFTs, who likened the burgeoning digital market to Bitcoin when it first made landfall in 2009—but with a twist. 

“NFTs today are what Bitcoin was 10 years ago, except that there is a robust community made up of creators and investors who co-exist to determine the future path of a non-fungible token,” she said. 

She added that NFTs represent membership in a “special club,” meaning that NFT investments also include a “new meaning of social interaction.” 

The fund also includes a management fee of 0.65%, which means investors are charged $6.50 for every $1,000 invested. 

SEC warming to crypto

The NFTZ fund arrived shortly after the Securities and Exchange Commission (SEC) approved the first American Bitcoin futures ETF in October—the ProShares Bitcoin Futures ETF. 

The SEC’s decision—viewed as a watershed moment for the crypto industry—gave regular investors exposure to the cryptocurrency industry’s flagship asset on major stock exchanges, in turn promising to let in waves of new money into crypto. 

Since the ProShares fund launched in October, other Bitcoin futures ETFs have launched in the United States. 

This, in turn, has prompted Michael Sonnenshein, CEO of Grayscale, to lament that the launch of a Bitcoin spot ETF has become a “political issue.”