Monday, March 27

NFT’s first exchange-traded fund falls 16% in its first month

NFTs, or non-fungible tokens, are another aspect of crypto assets that are causing equal parts fury and confusion among investors, and since the beginning of December they have had the first exchange-traded fund that bets on them, despite the fact that at the moment it does so at a loss.

The exchange-traded fund NFTZ, from Defiance Investments, began trading at the New York Stock Exchange on Dec. 2 at $ 24, but started Monday at $ 20.24, down as much as 16 percent from its first day.

Despite the decline, the fund has improved slightly from the low of $ 18.13 reached on December 20, and It already has net assets of $ 10.75 million distributed through investments in 34 securities of companies that bet on technologies necessary to enhance NFTs, like the blockchain o la criptodivisa ethereum.

And it is that the fund perfectly explains its commitment to the NFT in your constitution brochure: You will not invest in them directly or through the use of derivatives, however, you will have an indirect exposure to them by virtue of your investments in operating companies that use them as part of their activity.

NFTs as the centerpiece of the metaverse

Defiance is a fund founded in 2018 by a former Blackrock worker, Matthew Bielski, who has set out to establish trading funds for emerging technologies such as 5G, the big data, or even the SPAC.

From Bielski’s investment instrument it is argued that the NFT “They have already revolutionized art, music and sports collectibles”, but that the blockchain technology foundation through which they operate “has the potential to create a whole metaverse, a shared virtual environment with a decentralized infrastructure that could transform the the way we work, interact and live, rewarding both creators and participants. “

The NFT, they explain from Defiance, are active with a digital code “that represents a specific and unique article”, and that allow people to “own the digital content that they value”, regardless of the platform they use to access it.

And in this context of a metaverse where users will pay to be the certified owners of certain digital assets, Defiance believes that companies that bet on NFTs will lead the market of the future.

From eBay to DraftKings to Playboy

With this idea in mind, the exchange-traded fund NFTZ has been launched towards a thematic exhibition to the ecosystems of NFT that involves the purchase of shares in companies such as Coinbase, where a user can archive and manage their NFT collection, or Playboy, which has launched an art collection in the form of NFT, called Rabbitars.

3.88 percent of the weight of the ETF fund, for example, is held by Jack Dorsey’s payment company, Block, which changed its name precisely on December 1 to expand its field of action and embrace the digital payments that will occur in environments such as the metaverse.

Another company with a weight of 4.07 percent in the exchange-traded fund NFTZ is eBay, which announced in May that it would allow the sale of NFT on its platform, boosting its shares about 20 percent since then.

The betting platform DraftKings It is also on the list of companies that make up the NFTZ listed fund, in this case with a weight of 4.36 percent, after its commitment to issue a kind of digital cards of the American football league in NFT format, looking forward to next year’s season.

Luck does not smile on an investment fund that seeks innovation

So that, Defiance has started on the wrong foot a journey in the world of NFTs in which it considers that it has the advantage of being the first “to reach a heights to which it does not set limits”.

Other traded funds of the investment entity have registered significant increases, such as the increase from $ 33 to $ 42 of its investment fund in 5G, but many have registered losses.

This is the case of its fund for the “reopening of the tourism sector”, which invests in cruise companies such as Carnival, airlines such as Delta or hotels such as Marriott, whose total value has fallen from $ 24.4 to $ 21.31.

A similar path has been followed by Defiance’s corporate ETF SPAC, which is currently trading at $ 22 after starting the year at around $ 29.

● Consult the magazine’s Fund Managers guide Investment to know the who’s who of the sector in Spain.