Defiance Debuts ETF To Short Blockchain Companies

New offering shorts the largest blockchain ETF with top holdings that include Core Scientific, Silvergate and Accenture

article-image

Blockworks Exclusive Art by Axel Rangel

share
  • Amplify Investments’ Transformational Data Sharing ETF (BLOK) is down roughly 50% year to date
  • Though Defiance is bullish on crypto long-term, CEO says being short crypto firms will provide the best downside protection in the current environment

ETF provider Defiance has launched a fund that bets against the blockchain industry by holding short positions in the largest blockchain ETF in the US.

As the industry grapples with the downturn in crypto and traditional markets, the Defiance Daily Short Digital Economy ETF (IBIT) seeks daily inverse returns of Amplify ETFs’ Transformational Data Sharing ETF (BLOK).

The fund group had revealed plans to launch IBIT in April. 

The new fund enters short positions of the actively managed BLOK fund, which includes top holdings Core Scientific, Silvergate, Accenture, IBM and Overstock.com, as of Wednesday.

BLOK has returned about 26% since its inception in 2018, but the fund is down roughly 50% year to date and about 15% in the past month. The ETF has about $540 million in assets.

Though Defiance remains bullish on the growth of crypto over the next few years, CEO Sylvia Jablonski said in a statement, the executive pointed to the recent layoffs and revenue losses around the industry.

“We believe shorting positions such as Coinbase, Galaxy and Robinhood, along with those involved in the metaverse — like Meta and Roblox — will provide the best downside protection in the current environment,” she added.

Coinbase is down about 73% year to date, while Galaxy Digital and Robinhood’s stock price has dropped roughly 70% and 47%, respectively, so far in 2022.

When the Federal Reserve stops hiking interest rates and inflation starts to wane, investors are likely to dip their toes back into crypto, Jablonski told Blockworks.

“Investors are taught to have well diversified portfolios, a barbell approach, or hedges for tough times,” she said in an email. “Having a product available to cover the crypto space in this same spirit could be very advantageous to traders and investors alike.”

Defiance has seven ETFs trading in the US with roughly $1.2 billion in combined assets, according to ETF.com. Its largest is its Next Gen Connectivity ETF (FIVG), which has gathered nearly $1 billion in assets since its March 2019 launch.

The firm in December launched the Defiance Digital Revolution ETF (NFTZ), which invests in companies with exposure to NFTs, blockchain and cryptocurrency. Like BLOK, NFTZ has Silvergate as a top-five holding, alongside Marathon Digital, Draftkings, Cloudflare and Robinhood. 

NFTZ, which has gathered just $6 million in assets during its time on the market, is down about 63% so far this year.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.jpg

Research

Figure, founded by former SoFi CEO Mike Cagney, has emerged as a leader in onchain RWAs, with ~$17.5B publicly tokenized. The platform’s ecosystem volume is growing ~40% YoY as it expands beyond HELOCs into student loans, DSCR loans, unsecured loans, bankruptcy claims, and more. Operationally, Figure cuts average loan production cost by ~93% and compresses median funding time from ~42 days to ~10, creating a durable speed-and-cost advantage.

article-image

Layer 2 network Taiko integrates Chainlink Data Streams to deliver reliable onchain market data for DeFi and institutions

by Blockworks /
article-image

The license will allow Bullish to operate in New York under strict digital asset rules

by Blockworks /
article-image

The derivatives giant expands crypto offerings with new Solana and XRP futures options, pending regulatory review

by Blockworks /
article-image

Nasdaq-listed firm to fund Solana token purchases and expand its blockchain-focused treasury strategy

by Blockworks /
article-image

The partnership deepens liquidity and lowers conversion costs as demand for regulated stablecoins grows worldwide

by Blockworks /
article-image

Any indication the FOMC is less dovish than anticipated could weigh on crypto, industry watcher says