The first exchange-traded fund (ETF) based on non-fungible tokens will be launched by Defiance ETF.
The Defiance Digital Revolution ETF (NFTZ) tracks the BITA NFT and Blockchain Select Index, giving investors thematic exposure to blockchain and cryptocurrency ecosystems, including NFT marketplaces and issuers like Coinbase and Playboy.
It is one of the first ETFs to tap into the expanding market for NFTs, albeit only providing exposure to companies rather than cryptocurrencies directly.
The index is based on rules and is rebalanced periodically, and the fund charges a 0.65% management fee.
Market for NFTs
NFTZ “is a fantastic method for investors to acquire exposure to not only the fast-growing blockchain technology component of the digital world, but also companies involved in the resurrection of NFTs,” Sylvia Jablonski, Defiance ETFs’ chief investment officer, said.
“The companies in our ranking are important stakeholders in the development of Web 3.0,” she added.
NFTs, according to Jablonski, will profoundly alter the economic model for sports, artists, and other creators, as well as other businesses, in ways that have yet to be imagined.
She believes that NFTs will surpass the internet in size, citing the fact that total NFT trading volumes surpassed $15 billion in October.
ETFs on the rise
NFTZ is one of several blockchain-themed ETFs that have sprung up, while numerous applications for a Bitcoin spot ETF have been rejected by the US Securities and Exchange Commission.
The SEC ultimately approved the first Bitcoin-based ETF in October, albeit one based on Bitcoin futures, which is the closest authorities have come to approving a cryptocurrency fund.
Fidelity Investments, fed up with waiting for clearance in the US, may debut its Fidelity Advantage Bitcoin ETF on the Toronto Stock Exchange as soon as next week.
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