Defiance Launches $IBIT: First Short Blockchain ETF - to Hedge Crypto Industry
Defiance has launched the Defiance Daily Short Digitizing the Economy ETF (IBIT), targeting short positions in companies affected by the ongoing crypto winter. The ETF will short the Amplify Transformational Data ETF (BLOK), which focuses on blockchain and crypto firms. CEO Sylvia Jablonski emphasized the need for downside protection through shorting positions in major players like Coinbase and Roblox, especially amidst rising layoffs and revenue losses in the sector. Defiance aims to provide investors with a dynamic tool for navigating a challenging market environment.
- Launch of IBIT allows investors to hedge against downturns in the crypto sector.
- Targeted short positions could lead to potential gains amidst market volatility.
- Dependent on the performance of the Amplify ETF (BLOK), which may face challenges.
- Shorting positions exposes investors to risks if the crypto market rebounds.
The Defiance Daily Short Digitizing the Economy ETF (Graphic: Business Wire)
IBIT enters short positions of the Amplify Transformational Data ETF (BLOK), a leading actively managed ETF that offers exposure to companies in the crypto and blockchain ecosystem.
“We remain 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
About Defiance ETFs
Defiance’s dynamic suite of thematic ETFs allows retail and institutional investors to express a targeted view on dynamic sectors that are leading the way in disruptive innovations.
Important Information:
The Fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company. Please read it carefully before investing. A hard copy of the prospectus can be requested by calling 833.333.938 or by visiting www.defianceetfs.com/ibit
For more information and to obtain a prospectus for the Amplify ETF, BLOK, please visit https://amplifyetfs.com/blok. BLOK is distributed by
Investing involves risk. An investor could lose the full principal value of their investment within a single day. As an ETF, the fund may trade at a premium or discount to NAV. ETF Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
The Fund is non-diversified and may invest more of its assets in the securities of a single issuer or a smaller number of issuers making it more subject to associated risk. The Fund is a recently organized investment company with no operating history or track record for investors to evaluate. There is no assurance that the Fund will achieve its investment objective.
The Fund’s investments in derivatives including swap agreements may pose risks in addition to, and greater than, those associated with directly investing in securities. Derivative contracts ordinarily have leverage inherent in their terms. Accordingly, a relatively small price movement may result in an immediate and substantial loss to the Fund. The use of leveraged derivatives can magnify the Fund’s potential for gain or loss and, therefore, amplify the effects of market volatility on the Fund’s share price.
The Fund is designed as a short-term trading vehicle and is intended to be used by investors who intend to actively monitor and manage their portfolios. The Fund is designed to be utilized only by sophisticated investors, such as traders and active investors employing dynamic strategies. Investors should (a) understand the consequences of seeking daily inverse investment results; and (b) understand the risk of shorting. Investors who do not understand the Fund or do not intend to actively manage their funds and monitor their investments should not buy the Fund. This Fund is not suitable for all investors.
The Fund shorts the Amplify ETF which invests in companies actively engaged in blockchain and crypto technology. Companies that rely heavily on technology are particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, competition and cybersecurity incidents. Neither the Amplify ETF or IBIT invests directly into bitcoin or cryptocurrency.
Definitions:
Blockchain is a system of recording information in a way that makes it difficult to change the system. A blockchain is a digital ledger of transactions that records the provenance of a digital asset.
Cryptocurrency is a form of currency that uses digital files as money. They refer to database entries that cannot be changed unless specific conditions are met. Cryptocurrencies are generally secure as they use technology (cryptograph) designed to prevent anyone from creating counterfeit money or from spending more money than is in their account. Cryptocurrencies are currently not government issued, so they are not backed by any government.
Crypto miners process, validate, and securely transfer cryptocurrencies. Miners are paid to use their mining hardware to validate transactions on Proof-of-Work networks. The crypto mining industry is a necessary and core component of the cryptocurrency ecosystem. Anyone who chooses to participate in crypto mining, whether an individual or a company, will run various computers and machines to solve a variety of math problems. As a result of solving these problems, the network is secured, and transactions are recorded and stored on the “blockchain,” which is essentially a database maintained across many computers.
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Source: Defiance ETFs
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