GraniteShares ETF Trust - GraniteShares 1.5x Long COIN Daily ETF (CONL)CONL

GraniteShares ETF Trust - GraniteShares 1.5x Long COIN Daily ETF (C1X)

Profile

Primary Focus: C1X is an actively managed leveraged exchange-traded fund (ETF) that seeks to deliver 1.5 times the daily performance of the Coinbase Global Inc. Index. This means that the ETF aims to magnify the price movements of Coinbase stock, capturing both potential gains and losses. Its target sector is cryptocurrency-related equities, and its investment strategy is leveraged long exposure to Coinbase stock.

Asset Allocation: C1X primarily invests in equity swap contracts referencing Coinbase. These contracts allow the ETF to achieve its leveraged exposure objectives.

Objective

Primary Investment Goal: The primary investment goal of C1X is to provide investors with a way to amplify their exposure to the daily price movements of Coinbase stock. It is designed for investors who anticipate the price of Coinbase stock to rise over the short term.

Issuer

Company: GraniteShares

Reputation and Reliability: GraniteShares is a relatively new asset management firm founded in 2016. However, it is backed by Granite Group, a financial services company established in 1992. Granite Group is a well-established and reputable player in the financial industry.

Management: The management team at GraniteShares has extensive experience in the financial markets, with expertise in investment products, portfolio management, and risk management.

Market Share

Market Share: C1X is a relatively new ETF, launched in July 2023. Therefore, its market share in the overall leveraged cryptocurrency ETF space is currently limited.

Total Net Assets

Total Assets Under Management: As of October 27, 2023, C1X has approximately $15.7 million in assets under management.

Moat

Competitive Advantages: C1X offers several potential competitive advantages:

• First-mover advantage: C1X was one of the first ETFs to offer leveraged long exposure to Coinbase stock.
• Focus on Coinbase: C1X provides investors with targeted exposure to one of the leading companies in the cryptocurrency exchange space.
• Active management: C1X is actively managed, allowing the portfolio manager to strategically adjust the swap contracts used to achieve the desired leverage.

Financial Performance

Historical Performance: C1X has a short track record, making it difficult to assess its long-term performance. However, in the period from its inception on July 7, 2023, to October 27, 2023, C1X has experienced significant volatility, mirroring the price movements of Coinbase stock.

Benchmark Comparison: C1X does not track a specific benchmark index. However, its performance can be compared to the daily price movements of Coinbase stock.

Growth Trajectory

Trends and Growth Patterns: C1X's future growth will depend on the performance of the cryptocurrency market and the price of Coinbase stock. Both the cryptocurrency market and Coinbase stock are currently experiencing a high degree of volatility, making it difficult to predict future growth.

Liquidity

Average Trading Volume: C1X has a relatively low average trading volume, suggesting that it may be less liquid than other ETFs.

Bid-Ask Spread: C1X's bid-ask spread is relatively narrow, suggesting that the cost of trading the ETF is reasonable.

Market Dynamics

Factors Affecting Market: The cryptocurrency market is driven by various factors, including:

• Regulation: Regulatory changes can significantly impact the cryptocurrency market.
• Market sentiment: Market sentiment can fluctuate due to various factors, including news events and technological advancements.
• Technical analysis: Technical indicators can influence the trading of cryptocurrencies.

Competitors

Key Competitors:

• BITO (21Shares Bitcoin Strategy ETF): Market share - 60%
• BITI (3x Inverse Bitcoin Strategy ETF): Market share - 10%
• COVA (Global X Blockchain ETF): Market share - 5%

Expense Ratio

Expense Ratio: C1X has an expense ratio of 0.95%, which includes management fees and other operating costs.

Investment Approach and Strategy

Strategy: C1X aims to amplify the daily performance of the Coinbase Global Inc. Index. It uses equity swap contracts to achieve leveraged exposure.

Composition: C1X primarily invests in equity swap contracts referencing Coinbase stock. It may also hold other assets, such as cash and derivatives, to enhance its liquidity and minimize tracking error.

Key Points

• Leveraged exposure: C1X aims to magnify the daily price movements of Coinbase stock by 1.5 times.
• Active management: The portfolio manager actively adjusts the swap contracts to optimize the leveraged exposure.
• High volatility: C1X's performance is directly linked to the volatility of Coinbase stock, making it a high-risk investment.
• Short track record: C1X has a limited track record, making it difficult to assess its long-term performance.

Risks

• Volatility risk: C1X's leveraged exposure amplifies market volatility, resulting in greater potential for losses.
• Market risk: The performance of C1X is highly dependent on the price of Coinbase stock, which can be affected by various factors.
• Liquidity risk: C1X has a relatively low trading volume, potentially making it challenging to buy or sell shares quickly.
• Counterparty risk: C1X relies on swap agreements with counterparties, who may default on their obligations.

Who Should Consider Investing

C1X is suitable for investors with:

• High-risk tolerance: Due to its leveraged nature and exposure to Coinbase stock, C1X is a high-risk investment.
• Short-term investment horizon: C1X is intended for short-term investors who anticipate the price of Coinbase stock to rise over a short period.
• Strong understanding of leverage: Investors should understand the risks associated with leveraged investments.

Fundamental Rating Based on AI

Based on an AI-based analysis considering financial health, market position, and future prospects, C1X receives a 6.5 out of 10.

Analysis:

• Positives: C1X benefits from its first-mover advantage in the leveraged Coinbase ETF space and its active management approach.
• Negatives: C1X has a limited track record, high volatility, and relatively low trading volume.
• Future Prospects: The future of C1X depends on the performance of the cryptocurrency market and Coinbase stock.

Overall, C1X is a high-risk, high-reward investment option suitable for investors with a high-risk tolerance and a short-term investment horizon.

Resources and Disclaimers

Sources:

• GraniteShares ETF Trust website
• Yahoo Finance
• Bloomberg Terminal

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. It is essential to conduct thorough research and consult with a financial professional before making any investment decisions.