"Bigger than the internet." That's how big the market for non-fungible tokens (NFTs) could be, according to Defiance ETFs' Chief Investment Officer Sylvia Jablonski. An NFT is stored on the blockchain and can resemble an image, video, piece of artwork, music, or other item. In March, digital artist Beeple sold an NFT resembling his work for $69 million.
There's significant potential in the NFT market, especially as the popularity of cryptocurrencies and blockchain continues to soar. It's that opportunity that investors can tap into with Defiance's latest exchange-traded fund (ETF), the Defiance Digital Revolution ETF (NYSE Arca:NFTZ). It is the first such fund that is focused on NFTs. The fund's inception date was Dec 1. and it currently has 34 holdings, which are made up of companies "with relevant thematic exposure to the NFT, blockchain and cryptocurrency ecosystems."
The three largest holdings in the fund include Silvergate Capital Corp (NYSE:SI), Cloudflare (NYSE:NET), and Plby Group (NASDAQ:PLBY), each accounting for more than 5% of the fund's total weight. The ETF has an expense ratio of 0.65%. Although this is a relatively small fund, Defiance says it is not actively managed but it is rebalanced on a quarterly basis.
By just owning stocks that have positions in the crypto and NFT market, this ETF can offer investors a safer way to gain exposure to the industry without taking on excessive risk. While there will still be some volatility, it won't be nearly as risky as holding an NFT or investing into a cryptocurrency directly.
