NFTs (non-fungible tokens) have been around for half a decade, which makes the blockchain-based collectibles a fledgling in the financial sector. Are there any ETFs (exchange-traded funds) that make it easy for investors to tap into the NFT space?
Here's what to know about the state of NFT-filled ETFs, and whether investors can get in on the action through an accessible stock.
Can ETFs hold NFTs?
ETFs are baskets of securities. Traditionally, ETFs include a collection of individual stocks. Nowadays, those securities can even include NFTs.
Despite the fact that the acronyms can be confusing at first glance, the potential link between ETFs and NFTs is strong. NFTs remain an emerging asset class and, while speculative, the link between the two financial products will likely grow. The public's interest and innovation in the NFT space could create a new investing trend.
What happened to Ceresion, the NFT ETF platform?
A press release on Aug. 3 announced that startup Ceresion was launching its ETF market for NFT securities. According to the press release, "As a decentralized trading platform, Ceresion introduces the ETFs – NFTs exchange to the blockchain sphere."
The platform announced that it would operate using the Ceresion Token, and added that "investors could create their own ETFs structures and include different cryptocurrency and NFT tokens."
Since the publication of this press release, the Ceresion website has gone offline. Riddled with grammatical errors (a common red flag in these types of startups), it's possible that Ceresion was an attempt at fraud. This hasn't been confirmed, but coin offerings and crypto pump-and-dump schemes are commonplace. While there haven't been any reports of fraud by Ceresion, there also hasn't been any word from the company since it announced its token and platform and subsequently went dark.
For now, investors will have to look to the traditional stock market for the NFT ETF of their dreams.
The ARK Fintech Innovation ETF paves the way for NFT ETFs.
Cathie Wood's ARK Fintech Innovation ETF (ARKF) is one of the largest owners of Coinbase (NASDAQ:COIN). In fact, COIN accounts for 8.14 percent of the total $3.4 billion assets under management in ARKF, topped only by Square (NYSE:SQ) with 9.77 percent.
ARKF also owns DraftKings (NASDAQ:DKNG), which has made its presence known in the NFT and crypto space.
Are there any other ETFs giving investors access to NFTs?
While ARKF doesn't offer direct NFT investing, investing in the fund does propel NFT innovation through popular public stock. Recently, a decentralized crypto group called ConstitutionDAO lost out on an auction of a rare copy of the U.S. Constitution. Still, non-fungible assets are growing through myriad DAOs (decentralized authoritative organizations), and these groups are ready to fuse funds and NFTs.