An exchange-traded fund (ETF) that will grant investors exposure to the world of non-fungible tokens, hit the market on Thursday. The ETF is called NFTZ.
NFTZ is an initiative of Defiance ETFs- a company that does not invest in crypto assets directly yet has added to the growing list of blockchain-related equity offerings. Hence, NFTs are becoming more prominent and borderless by the day.
NFTs in the Marketplace
NFTs have soared in popularity this year. Their total trading volume reached $15 billion as of October. And the figures continue rising with such new additions.
The Defiance Digital Revolution ETF (NFTZ) is already trading on the New York Stock Exchange. It possesses an expense ratio of 65 basis points, which exposes investors to the NFT, blockchain, and cryptocurrency ecosystems by investing in NFT marketplaces and issuers. After the Thursday launch, NFTZ fell 2.5% to $23.50 at 12:01 p.m. in New York.
NFTZ tracks the Blockchain Select Index and BITA NFT. This consists of companies building a platform, developing technology that will use NFTs, trading platforms, mining, or banking services in the crypto space.
The fund’s top five investments are Cloudflare, Silvergate, Bitfarms, Northern Data, and PLBY Group. In October, the latter (PLBY Group) unveiled the NFT collection — Playboy Rabbitars.
Additionally, Defiance has eight other ETFs trading in the US with nearly $1.7 billion combined assets. The $1.3 billion Defiance Next Gen Connectivity ETF (FIVG) is its most extensive, launched in March 2019.
‘NFTs Bigger Than the Internet’
Defiance Co-Founder and Chief Investment Officer Sylvia Jablonski told Insider that NFTs could be bigger than the internet.
“The NFT revolution will fundamentally change the economic model for artists, athletes, creators, and many more industries that we can’t even conceive of today.” She said, “NFTs could be bigger than the internet.”
She believes they are unique, considering the cultural revolution they have brought. And are the key to everything that is or will be the metaverse.
NFTs reward content creators and artists when buyers purchase a particular project, Jablonski explained. This is beneficial to the creators as well as the company that can use the funds to boost the value of the stock.
“With NFTs, value and direction of the asset is determined both by the creator and the investor,” Jablonski said. “People like to participate in something, and I think that special aspect is what will make this space essentially grow to be huge.”
Another Blockchain ETF?
NFTZ adds to the growing list of crypto or blockchain-related equity ETFs in the US.
This year has seen the launch of several ETFs, including the $130 million Bitwise Crypto Industry Innovators ETF (BITQ), the First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT), the Volt Crypto Industry Revolution and Tech ETF (BTCR), and the Invesco Alerian Galaxy Crypto Economy ETF (SATO).
Currently, the largest crypto ETF in the US is BLOK with nearly $1.7 billion in assets.
Well, the critical difference between NFTZ and its competitors is that other firms are actively managed. Defiance invests in stocks that are involved in the issuance, creation, and commercialization of NFTs. Making Defiance more transparent for the investor.
“We feel our investors should see what we hold, when and how we select holdings based on index rules,” Jablonski said.
Bloomberg wrote that the fund’s partnering companies are its “key players” in building a metaverse. And as we know, NFTs, partners and blockchain technology are the keys to unlocking the metaverse. Thus, Defiance is in the right direction.
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