First Coinbase-leveraged ETF Makes Market Debut Ahead of Earnings Report

Demand for investments betting on the success of crypto is growing, GraniteShares founder said

article-image

Blockworks exclusive art by axel rangel

share

key takeaways

  • Coinbase fans can lock in a leveraged trade via an ETF ahead of tonight’s earnings
  • Alongside its long Coinbase product, GraniteShares also launched -1x short and 1.25x long Tesla ETFs and a 1.75x long Apple ETF

Investors keen to amplify their bets on Coinbase ahead of earnings are in luck: A new ETF offering 1.5 leverage made its Nasdaq debut hours before the exchange’s scheduled earnings report release. 

Issuers have been quick to list single-stock products in recent weeks after the SEC approved the fund structure last month, although regulators cautioned investors to be mindful of the investment vehicles’ heightened risk. 

GraniteShares, founded in 2016, has listed collateralized, short and leveraged single-stock exposure ETFs across Europe for the past three years. Moving into the US market provides investors with a superior, safer structure, Will Rhind, GraniteShares founder, said. 

“You can’t lose more than your investment,” Rhind said. “When you have a traditional margin account and with traditional forms of leverage, you can lose more than your investment and end up owing money to the broker, which can be very dangerous. With ETFs, that’s not the case.”

The new ruling came months after the SEC greenlighted the first bitcoin futures ETF products, which issuers praised as the safer, easier option to gain exposure to the asset. Some investors however expressed concern over the high premiums and speculative nature of the investment vehicles. If a leveraged bitcoin ETF is ever approved, Rhind is confident demand for leveraged single-stock products will remain high. 

“The commission has been quite clear that it’s not going to happen,” he said. “Even if there was a leveraged bitcoin ETF out there, it’s not going to affect us that much, because clearly bitcoin and Coinbase are two different things.” 

Alongside its long Coinbase product, GraniteShares also launched -1x short and 1.25x long Tesla ETFs and a 1.75x long Apple ETF. The firm based its product suite off of trends it saw in European markets, Rhind said. 

“In terms of picking our spots, we went for more long products, because that’s where we see the majority of demand in Europe, with the exception of Tesla,” Rhind said. “We see a lot of demand for Tesla, albeit we do have more demand on the long side than the short side, but there is a lot of demand from both sides.” 

The GraniteShares 1.5x Long COIN Daily ETF (CONL) opened Tuesday morning at $23.35. It was trading at $22.70 with a sales volume of 726 as of 2:34 pm ET. The fund manager’s long Tesla ETF, which opened at $25.10, had a sales volume of 4,916. 

The funds launch as Coinbase is scheduled to release its second quarter earnings report after market close Tuesday. Analysts expect the exchange to post a quarterly loss of $3.04 per share, which would place earnings down 147.4% year over year. Over 26 polled investment analysts, 12 of them rated Coinbase a buy Tuesday, while 9 advised holding, according to CNN

“It’s a nice coincidence that today is the earnings, we’re looking forward to it,” Rhind said. “It’s a good addition to the market, and there’s a lot of demand for these types of products.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

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 (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

Revolut said that the standalone crypto exchange is currently “invite only”

article-image

The stock price jump comes after Coinbase reported ending its seven-quarter run of net losses during the fourth quarter

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders