ETFs
New ETF Lets Traders Short Coinbase as Crypto Stocks Deemed ‘Most Volatile ETFs Ever’ – DL News
- YieldMax has launched a Coinbase ETF.
- The fund allows traders to short sell the company’s shares.
- It also generates a return that should be close to 4% per year.
As the crypto community eagerly awaits the launch of Ethereum spot exchange-traded funds, Wall Street firms are creating other ETFs to bet on the industry.
ETF issuer YieldMax ETF launched an inverse Coinbase ETF on Tuesday.
The fund — ticker FIAT — allows traders to profit from Coinbase’s stock declines while earning a yield at the same time.
And it’s not the only ETF that depends on the performance of a crypto company.
Crypto ETFs galore
YieldMax’s new ETF is for investors who want to make money when Coinbase crashes.
The bottom it works like this:He holds long positions on bearish options contracts, called puts, while selling short bullish options, called calls.
This allows the fund to perform well when the share price falls.
But the ETF also sells short put options to earn a yield, which it then distributes as a dividend to fund holders.
Join the community to receive our latest stories and updates
Most of YieldMax’s ETFs that follow the same strategy produce an annual return of around 4%.
Products for bulls
YieldMax also has a product for Coinbase bulls.
The company threw a Coinbase ETF that produces a yield of 4.89% which is also bullish on the company’s shares.
It also offers similar strategies for Bitcoin and MicroStrategy.
Meanwhile, ETF issuer Rex Shares filed on June 27 for a MicroStrategy ETF that will allow investors to get twice the leverage on the company’s shares.
“These ETFs are almost certain to be the most volatile ever seen in the U.S.,” said Eric Balchunas, ETF analyst at Bloomberg Intelligence. published on X.
The fund “will likely have about 20 times the volatility of the S&P 500,” he added.
The new ETF filings – and launches – come as MicroStrategy and Coinbase have become Some of the most popular actions be short on the US stock market.
Cryptocurrency Market Players
- Bitcoin rose 1.4% over the past 24 hours to $58,443.
- Ethereum is down 0.5% over the same period, to around $3,080.
What we read
Tom Carreras is a markets correspondent at DL News. Got news about Bitcoin and the markets? Contact us at tcarreras@dlnews.com