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Defiance ETFs has filed with the US financial regulator for the launch of a Thematic ETF Known as leveraged Ethereum futures ETF.
Defiance ETFs, a registered investment advisor and US exchange-traded fund (ETF) sponsor has recently applied with the SEC. This application is cited to launch a 2x leveraged Ethereum futures ETF. If approved, the ETF could begin trading by the end of June, under the ticker “ETHL,” according to Bloomberg ETF analyst James Seyffart.
What Are Thematic ETFs
Thematic ETFs are exchange-traded funds that focus on specific industries, trends, or themes such as technology, sustainability, or developing markets. They offer a way to invest in themes or trends that align with your interests or investment strategy.
Volatility in Thematic ETFs
Thematic ETFs offer higher rewards but also come with higher risks. They lack diversification and focus on specific themes or trends. However, ESG-themed ETFs have become more popular due to their association with emerging sectors like renewable energy, robotics, and blockchain.
Defiance 2X Ether Strategy ETF
The proposed ETF, called the Defiance 2X Ether Strategy ETF, aims to provide investors with twice the daily return of the CF Rolling CME Ether Futures Index.
This ETF is designed to offer investors more aggressive exposure to Ethereum’s price movements and is riskier than alternatives that don’t use leverage.
The fund’s filing states that it “seeks to benefit from increases in the price of Ethereum Futures Contracts.” The company filed for this ETF a few days after applying for a 2x leveraged ETF to short MSTR stock. Both funds will be advised by Tidal Investments LLC.
Total ETFs and AUM Size Of Defiance
Defiance ETFs has a total of 9 ETFs, with assets under management amounting to around $1.4 Billion as of April 2024 according to data from VettaFi. Moreover, the company’s products are focused on innovative and disruptive sectors.
These sectors will include quantum computing, next-gen connectivity, next-gen H2, treasury alternative yield, and S&P 500 target income, among others.
The SEC’s potential approval of a spot Ethereum ETF is currently the subject of intense debate. Industry insiders are skeptical about the chances of a green light as the deadline approaches in May.
The number of thematic ETFs has increased in recent years, driven by investors’ interest in tapping into specific industry trends or sectors. This growth has continued despite challenges to sectors covered by thematic ETFs, highlighting the ongoing appeal of these specialized investment vehicles.
Summary
In the growing world of investments, investors are looking for better rewards. Investing in ETFs is a way to generate wealth but most of the returns are unattractive and replicate the S&P 500 and Dow Jones. However Thematic ETFs are a way to generate higher returns as they are sector-focused. One such ETF is Ethereum Futures ETF which leverages 2x ETH. Defiance ETFs has applied to the US SEC for its launch.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos or related indexes comes with a risk of financial loss.
Amanda Shinoy is one of the few women in the space invested knee-deep in crypto. An advocate for increasing the presence of women in crypto, she is known for her accurate technical analysis and price prediction of cryptocurrencies. Readers are often waiting for her opinion about the next rally. She is a finance expert with an MBA in finance. Quitting a corporate job at a leading financial institution, she now engages herself full-time into financial education for the general public.
