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Defiance Files for Bitcoin Basis Market Neutral ETF and Ethereum Version

According to Defiance’s SEC filing, the proposed ETFs would apply basis trading strategies using Bitcoin and Ethereum spot-futures spreads to mitigate volatility while seeking arbitrage-driven gains.

BTC
ETH

Summary

Defiance has filed with the SEC to launch two ETFs that use basis trading strategies tied to Bitcoin and Ethereum. The funds are designed to profit from differences between spot and futures markets while minimizing exposure to large price swings. The Bitcoin ETF plans to hold a long position in BlackRock’s iShares Bitcoin Trust (IBIT) and short Bitcoin futures, with a similar approach applied for Ethereum.

Terms & Concepts
  • Basis Trade: A trading strategy that seeks to profit from the difference between spot prices and futures prices of an asset.
  • Market Neutral ETF: An exchange-traded fund designed to generate returns regardless of market direction by offsetting long and short positions.
  • IBIT: BlackRock’s iShares Bitcoin Trust, an ETF providing indirect exposure to Bitcoin prices.