Targeting cryptocurrency basis trading Defiance has launched two ETFs

According to US media reports, ETF issuer Defiance has submitted an application to the US Securities and Exchange Commission, planning to launch two exchange-traded funds built around so-called "basis trading" - one pegged to Bitcoin and the other pegged to Ethereum. This strategy has been a common trading method in the cryptocurrency field for many years, aiming to make profits by using the price difference between the spot market and futures contracts: investors buy cryptocurrency tokens, sell corresponding futures contracts, earn the price difference between the two, and then repeat this operation to strive to obtain stable returns from the price difference, while basically avoiding the impact of large price fluctuations. The trading codes that Defiance plans to set for these two ETFs are "NBIT" (Bitcoin-related) and "DETH" (Ethereum-related) respectively. These two funds will essentially convert the above trading process into "one-click operation" ETF products. Among them, the Bitcoin version of ETF will buy Bitcoin spot funds such as BlackRock IBIT and short Bitcoin futures on the Chicago Mercantile Exchange (CME); its expected returns come from the price spreads between the two markets, and the price spreads are affected by factors such as volatility and demand dynamics.