Riot's Crypto Mining Success Spurs Investor Interest With Defiance's New ETF

Bitcoin mining and digital infrastructure titan Riot Platforms RIOT is currently in focus in the blockchain world.

According to its December operations update, steady growth in Bitcoin production and infrastructure development ruled the 2024.

With approximately 17,722 BTC on its balance sheet and valued at around $4.4 billion, Riot is not just mining Bitcoin. The company is expanding its roots in the decentralized digital asset economy, making it a crypto mining leader.

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The Perfect Storm For ETFs With Exposure To Riot

Defiance ETF recently launched an offbeat fund that provides a targeted, 200% daily leveraged exposure to Riot's share price.

The Defiance Daily Target 2X Long RIOT ETF RIOX uses a mix of short-dated, in-the-money call options and swap agreements to achieve a leveraged exposure while actively managing volatility risks.

The fund's net expense ratio is 0.95% which is on the higher side but considering the uniqueness of the offering, the expense ratio seems reasonable. The ETF has amassed over $1.48 million in assets under management already.

The ETF allows investors to indirectly gain exposure to the broader blockchain industry which continues to withstand regulatory and macroeconomic challenges and expand.

Riot's growing clout and the launch of RIOX could benefit other ETFs with exposure to cryptocurrency stocks, especially Riot. Amplify Transformational Data Sharing ETF BLOK and VanEck Digital Transformation ETF DAPP are two other ETFs that hold Riot and other crypto stocks in their portfolios, and stand to gain from Riot's market performance.

Amplify Transformational Data Sharing ETF gives 2.18% weightage to Riot, and has an expense ratio of 0.76%. Meanwhile, VanEck Digital Transformation ETF holds 5.72% in Riot, and boasts a lower expense ratio of 0.51%.

Bitcoin's recent price resurgence, coupled with Riot's aggressive portfolio and growth strategy creates a compelling opportunity. The launch of the Defiance Daily Target 2X Long RIOT ETF is a timely response to the growing investor interest in tools with targeted exposure to high-performing, disruptive companies like Riot. Seasoned investors looking for short-term plays on Riot's price movements without requiring margin accounts are best suited to try this fund.

Riot and its promising Bitcoin mining numbers came out at the same time as Bitcoin climbed 10% over the past week. The currency reclaimed its $102,000 level on Jan. 6 and recouping losses from early December, when it fell to a low of just below $92,000 on December 30. The recovery has driven optimism in the crypto market, fueled by bullish sentiment surrounding Donald Trump's anticipated crypto-friendly policies.

U.S.-listed spot Bitcoin ETFs recorded $987 million in inflows on Jan. 6. That’s the highest since Nov. 21, according to data from SoSoValue. This uptick in bitcoin prices often signals a potential altcoin rally.

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