Defiance launches Ethereum ETF combining leverage and options income strategy

Defiance has rolled out a first-of-its-kind product with the launch of ETHI, a leveraged Ethereum exchange-traded fund that blends amplified exposure with an options-driven income stream.

Defiance has unveiled the Defiance Leveraged Long + Income Ethereum ETF (ETHI), the first exchange-traded fund designed to pair leveraged exposure to ether-linked products with an income-generating options strategy. 

The product began trading on Nasdaq on Sept. 18, according to a company press release.

Hybrid Ethereum ETF

ETHI seeks to deliver between 150% and 200% of the daily performance of U.S.-listed Ethereum (ETH) exchange-traded products, while simultaneously employing a credit call spread strategy to generate weekly income distributions. Retail investors who wish to take advantage of Ethereum’s growth potential while preserving a consistent cash flow are the target audience for this dual strategy. 

Ethereum, the second-largest cryptocurrency by market cap, has grown its range of applications and is a leader in decentralized finance. By combining leveraged exposure with an options overlay, Defiance positions ETHI as a way to benefit from Ethereum’s volatility while smoothing returns with income payouts.

Not direct ETH exposure

ETHI does not directly hold Ethereum or invest in derivatives linked to the spot price of Ethereum, despite its emphasis on the cryptocurrency. ETH-linked ETPs are tracked by the fund instead, providing regulated exposure within the ETF structure.

Defiance points out that the call spread strategy may cap upside in strong rallies, and that leverage can both magnify gains and losses. The ETF’s primary objective is long-term capital appreciation, with income generation as a secondary goal. Distributions are intended weekly, though the firm guarantees at least monthly payouts.

The launch follows the U.S. approval of spot and futures-linked products earlier this year, which has increased investor interest in ETH-based ETFs. Since its founding in 2018, Defiance has established a solid reputation for creating innovative leveraged and themed ETFs, such as single-stock and crypto-linked funds.

ETHI extends that strategy by combining leveraged exposure with systematic income, appealing to investors looking for structured ways to participate in Ethereum’s market cycles without margin accounts.