Defiance Plans ETF That Bets Against Crypto Industry

Proposed fund seeks returns that represent the inverse of the daily performance of Amplify ETFs’ BLOK fund


Blockworks Exclusive Art by Axel Rangel


key takeaways

  • BLOK, which launched in 2018, declined by roughly 15% during the first three months of 2022
  • Defiance in December launched an ETF investing in NFT marketplaces and issuers

Defiance ETFs is seeking to launch a fund betting against the US’s first blockchain ETF.

The fund group’s proposed Short Blockchain and Digital Assets Industry ETF seeks returns that represent the daily inverse of the performance of Amplify ETFs’ Transformational Data Sharing ETF (BLOK), according to a Thursday regulatory disclosure.

The proposed ETF will enter into short positions of the Amplify ETF as well as swap agreements with major global financial institutions. It seeks to achieve its investment objective only for the period of a single trading day and is not intended to be used by investors who do not actively monitor and manage their portfolios, according to the filing.

The disclosure does not indicate a ticker or expense ratio for the planned offering.

Defiance did not immediately return a request for comment. 

BLOK, which launched in January 2018, has roughly $900 million in assets under management. Though the fund’s holdings were previously limited to several mining and semiconductor companies, as well as companies investing in private blockchain stakes, Amplify CEO Christian Magoon previously told Blockworks, it now consists of more pure-play blockchain companies.

The fund’s current top five holdings are Silvergate, CME Group, SBI Holdings, MicroStrategy and Nvidia. Other constituents among the top 10 include Galaxy Digital and crypto exchange Coinbase.

Though BLOK has returned 105% since inception, the fund returned roughly -15% during the first three months of 2022, according to Amplify’s website.

A spokesperson for Amplify declined to comment on the proposed Defiance fund.

Defiance is not the first aiming to launch a product betting against the crypto industry.

Toroso revealed plans last September to bring to market the Elevate Shares Inverse Daily Blockchain ETF (KOLB), which would also seek daily results corresponding to the opposite of the performance of BLOK.

ProShares filed earlier this month to launch an ETF that would allow investors to essentially bet against bitcoin, and AXS Investments and Direxion followed suit.

Defiance has eight ETFs trading in the US with combined assets of about $1.4 billion. The firm in December launched its Digital Revolution ETF (NFTZ), which invests in NFT marketplaces and issuers.

Sylvia Jablonski, Defiance’s co-founder and chief investment officer, previously told Blockworks that NFTs will be bigger than the internet.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report cover graphics (4).jpg


Despite crypto gaming related projects and funds raising close to a billion dollars in November 2021, there have been only a handful of games that have attracted users apart from mercenary capital, and have had sustained activity for longer than a few months. Crypto gaming is going through an infrastructure phase. Theoretically, crypto gaming stands to benefit from purpose-built, high throughput chains, where blockspace is cheap (especially for games which are fully onchain). However, despite the launch of many gaming-focused chains, most crypto games are lacking in quality and quantity. Most new crypto gaming infrastructure either have no games or only a few games launched (e.g. Xai) or have failed to garner meaningful attention (e.g. Immutable X).


Also, the AI crypto bull case is still crystalizing, but token incentives are set to be at the heart of it


Successful distributed validator technology needs distributed funding, founders say


As Bloomberg analysts up their ether ETF approval odds, concerns about ETH’s liquidity and its possible status as a security remain


Ethereum is becoming a multilayered lasagna-like system, pushing people to the margins with its complexity and fees


Ether would be set to re-test its 2021 price high should the regulator unexpectedly approve ETH funds, industry watchers say


The Financial Innovation and Technology for the 21st Century Act, known as the FIT21 Act, is expected to head to the floor for a vote in the House in the afternoon on May 22