Wall Street Turns Crypto Bet Loved by Hedge Funds Into ETF Bait

Wall Street is repackaging a tried-and-trusted crypto trade into an ETF, betting that a new generation of retail investors want in on an arbitrage strategy beloved by institutional pros.

ETF issuer Defiance has filed with the US Securities and Exchange Commission to launch two exchange-traded funds built around the so-called basis trade — one tied to Bitcoin, the other to Ether. A crypto staple for years, the strategy seeks to profit from the price gap between spot markets and futures contracts. Investors buy the token, sell the futures, pocket the difference, and repeat, seeking to generate consistent yield from the spread while being generally insulated from outsize price swings.