GraniteShares 1x Short COIN Daily ETF (CONI)

Overview

The GraniteShares 1x Short COIN Daily ETF (COINZ) is designed to provide investors with a return that is -1x the daily performance of Coinbase (COIN) stock. It's a single-day investment strategy, meaning its performance is only directly correlated with the inverse of COIN's performance on any given day. COINZ is a leveraged ETF focused on shorting the daily returns of a single stock.

Reputation and Reliability

GraniteShares is a relatively new ETF provider, but is gaining recognition for its innovative and niche product offerings in the leveraged and inverse ETF space. They are generally considered to be reliable for delivering the designed outcome.

Management Expertise

GraniteShares employs a team experienced in managing leveraged and inverse ETFs, crucial for handling the complexities of daily resets and derivatives.

Goal

The ETF aims to deliver -1x the daily performance of Coinbase (COIN) stock.

Investment Approach and Strategy

Strategy: The ETF uses swaps and other derivative instruments to achieve -1x the daily return of the underlying asset (COIN). It does not aim to track the long-term performance of COIN, only its daily changes.

Composition The ETF primarily holds swap agreements and other derivatives designed to mirror the inverse daily performance of COIN stock. It typically doesn't hold physical COIN shares.

Market Share: COINZ holds a small market share as a niche inverse ETF focused on a single stock.

Total Net Assets (AUM): 11696185

Key Competitors

• Direxion Daily TSLA Bear 1X Shares (TSLQ)
• ProShares Short QQQ (PSQ)
• ProShares Short S&P500 (SH)
• ProShares UltraShort QQQ (QID)

Competitive Landscape

The competitive landscape includes other inverse ETFs focusing on different sectors or broader market indices. COINZ's advantage is its specific focus on Coinbase, while its disadvantage is the concentration risk associated with a single stock and the complexities of daily leveraged products. Other inverse ETFs provide broader market exposure or focus on other popular stocks like Tesla, offering investors diversification. The market is highly competitive, driven by investor demand for hedging tools and short-term trading strategies.

Historical Performance: Historical performance data is highly dependent on the performance of COIN. Due to the daily reset, long-term returns can deviate significantly from -1x the cumulative return of COIN.

Benchmark Comparison: The ETF's benchmark is -1x the daily performance of COIN. Tracking error can occur due to fees, expenses, and operational factors.

Expense Ratio: 1.15

Average Trading Volume

The average trading volume is moderate, which can impact the ease of entering and exiting positions, and might result in wider bid-ask spreads during less active trading periods.

Bid-Ask Spread

The bid-ask spread can fluctuate depending on market conditions and trading volume, and could be relatively wide compared to more liquid ETFs.

Market Environment Factors

COINZ's performance is directly influenced by the sentiment around Coinbase, cryptocurrency market trends, regulatory developments affecting the crypto industry, and broader market conditions impacting tech stocks.

Growth Trajectory

The growth trajectory depends heavily on investor interest in shorting Coinbase and the overall market sentiment towards cryptocurrency exchanges. There are no expected changes to the strategy or holdings.

Competitive Edge

COINZ offers a precise, single-stock inverse exposure to Coinbase, which is unique. Its niche focus allows investors to express a direct short view on Coinbase without shorting the stock directly, and offers access for investors who may not have access to margin or shorting capabilities. The disadvantage is that this ETF is not for buy and hold investors due to the complexities of daily compounding and may erode the principal amount of investment over time if COIN moves in an adverse direction over longer periods of time. It is designed for sophisticated traders.

Volatility

As an inverse ETF linked to a single stock, COINZ exhibits high volatility, potentially amplified by the inherent volatility of the underlying cryptocurrency market and Coinbase itself.

Market Risk

The ETF is subject to market risk associated with Coinbase, including regulatory risk, competition, and fluctuations in cryptocurrency prices. Single-stock concentration adds to the risk profile.

Ideal Investor Profile

The ideal investor is a sophisticated trader with a strong understanding of leveraged and inverse ETFs and a short-term bearish outlook on Coinbase. This ETF is not suitable for long-term investors or those seeking passive exposure.

Market Risk

COINZ is best suited for active traders seeking short-term tactical exposure to the inverse performance of Coinbase.

GraniteShares 1x Short COIN Daily ETF (COINZ) is a niche product designed for sophisticated traders who want to bet against Coinbase's stock on a daily basis. It provides -1x the daily performance of COIN through the use of swaps and derivatives. The ETF's performance is highly dependent on the daily movements of COIN, and it is not designed for long-term holding due to the effects of daily compounding. It offers a unique way to express a short-term bearish view on COIN, but comes with significant risks, including high volatility and potential tracking error. Investors should carefully consider their risk tolerance and understanding of leveraged and inverse ETFs before investing.

Data Sources:

• GraniteShares ETF Website
• SEC Filings
• Yahoo Finance
• Bloomberg

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investing in ETFs involves risk, including the potential loss of principal. Leveraged and inverse ETFs are particularly risky and are not suitable for all investors.