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YieldMax Introduces FIAT ETF to Hedge Against Coinbase

YieldMax launches FIAT ETF on NYSE Arca, offering inverse exposure to Coinbase via a synthetic covered put strategy for income generation.
YieldMax Introduces FIAT ETF to Hedge Against Coinbase

Highlights

  • FIAT ETF by YieldMax targets inverse exposure to Coinbase's stock, utilizing synthetic covered put strategies.
  • Coinbase's stock resilience: up 173% last year, 45% YTD, despite Bitcoin's correction.
  • YieldMax expands with Ether Option ETF, leveraging volatility without direct Ethereum investment.

YieldMax has revealed that it will be releasing its new Exchange-Traded Fund, the FIAT ETF, on NYSE Arca. This fund aims to provide short exposure to the share price of Coinbase Global Inc., the predominant cryptocurrency exchange in the United States.

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YieldMax Introduces FIAT ETF

YieldMax is launching its Short COIN Option Income Strategy ETF, which is intended to offer inverse exposure to Coinbase’s stock. As per the summary prospectus, the fund will employ a synthetic covered put strategy to accomplish this goal.

This includes the purchasing of put options, writing of call options on COIN stock and short put options with strike prices that are at 0-15% below the current prices to earn income.

However, the prospectus warns that the upside is that the fund will only be able to reap gains from a decline in the COIN stock price if there is not much drawdown because losses can be incurred from short put positions.

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Market Strategy and Potential Risks

The FIAT ETF is designed to capitalize on Coinbase’s stock decline while also generating passive monthly income. However, there are some risks involved in the strategy even with the innovation.

If, however, the stock price of Coinbase goes below the strike price then the fund may face some losses which may affect the potential profit from the synthetic short position. The statistics reveal that Coinbase’s stock has appreciated by 173% within the last one year and 45% so far this year even despite Bitcoin pulling back in the recent crypto market sell off.

The launch of the FIAT ETF is a part of the developing process of the new generation of financial instruments based on cryptocurrencies. This trend has accelerated with the launch of bitcoin spot ETFs in January and other strategies, including Roundhill’s Bitcoin-covered call strategy ETF that targets return via options.

YieldMax’s Expanding Portfolio

YieldMax is also increasing its presence in the ETF market. Recently, the firm applied for an Ether Option Income Strategy ETF that will employ the synthetic covered call strategy to capture the volatility of the Spot Ethereum ETFs for the investors’ gains.

This comes after the company launched its Bitcoin Option Yield Strategy ETF (YBIT) last year.

Nevertheless, the Ether Option Income Strategy ETF is not going to include the fundamental investment in Ethereum or any other Spot Ethereum ETF. However, Tidal Investments will oversee the management of the fund while ZEGA Financial will offer sub-advisory services.

Read Also: Decade Old Dormant Bitcoin (BTC) Address Wakes Up To 10,419% Profit

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Kelvin Munene Murithi

Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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