Defiance Bets on Futures Premiums with New Bitcoin and Ether ETFs

Defiance ETFs just dropped a bombshell—launching futures-based Bitcoin and Ether funds targeting that juicy premium play.

Riding the Rollercoaster

These aren't your granddad's ETFs. Defiance's new products leverage futures contracts to capture the spread between spot and futures prices—a move that screams 'alpha generation' in a market known for its wild swings.

The Mechanics Behind the Madness

Futures often trade at a premium to spot prices—especially in crypto's bull runs. Defiance's strategy banks on harvesting that difference, turning market structure quirks into potential returns. No direct crypto holdings—just pure derivatives sophistication.

Why It Matters Now

With institutional appetite growing but regulatory hurdles still looming, futures-based ETFs offer a backdoor into crypto exposure. They’re betting Wall Street still prefers the familiar wrapper of traditional finance—even if it means paying a premium for the privilege.

One cynical finance jab: Because nothing says 'innovation' like repackaging volatility into a tidy ETF—and charging a fee for the service.

Defiance’s ETF depends on a bull market

Defiance’s ETF strategy is successful during a bull market with a clear direction, where premiums on futures are usually high. In 2025, the carry trade has been profitable for the bulk of traders. 

The opportunity for tapping a futures premium depends on the markets, as some exchanges offer higher risk and more lucrative futures premiums. During peak market exuberance times, premiums on futures markets ROSE as high as 20%. 

ETH premiums are more unpredictable, but also offer potential earnings. Ethereum’s markets also often have futures prices below the spot market, breaking down Defiance’s strategy. However, on a long-term scale, both assets are retaining their bullish direction. 

The basis trade and the overall bullish trend are also what made Ethena’s strategy work, as a crypto-native project. 

Can CME achieve robust crypto earnings? 

The carry trade has been tried and tested in the crypto space, especially utilizing native markets like HTX, OKX, and Binance. However, a regulated product may have to use the CME futures market, which does not offer the same volatility dynamics. 

The institutional trading has wiped out some of the inefficiencies that allow crypto natives to tap the price difference between spot and futures. While spot traders on Binance can easily tap the exchange’s futures contracts, Defiance will have to achieve a similar result using the more liquid and efficient regulated ETF and futures markets.

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