Citing losses, Subversive Capital is winding down its “PUNK” ETF, shifting its strategic focus toward artificial intelligence (AI).
Following an approximately 30% loss over 15 months, the exchange-traded fund (ETF) that gambled against Meta’s metaverse vision is set to cease operations. Subversive Capital, the driving force behind this unique investment strategy, has decided to close and liquidate its Subversive Metaverse ETF, or “PUNK” as it’s commonly known, and redirect its attention to AI advancements.
The PUNK ETF was launched in January 2022 with a targeted investment strategy aimed at companies fostering the growth of the metaverse’s infrastructure and applications. Interestingly, Meta, Mark Zuckerberg’s tech giant, was not included in the investment list.
Subversive Capital, in its digital fund profile, underscored the relevance of socially responsible companies that are committed to principles like egalitarianism, democracy, sustainability, and facts for technological innovation and human progress. They went on to argue that Meta Platforms, Facebook’s parent company, directly undermines these principles. They suggested that any positive market capitalization threatens liberal democracy and the planet’s survival.
The board of trustees decided to immediately liquidate and close the ETF after business hours on May 31, 2023. The company, however, will maintain its normal operations concerning its other exchange funds.
Subversive Capital is the latest to join a growing list of firms pulling away from metaverse investments. The ETF had bet against Meta, with the stock priced around $300 at the fund’s inception. Nevertheless, Meta’s stock price plummeted to below $90 in November 2022, though it has since partially recovered, hovering around $240.
The ETF’s investments spanned various tech giants such as Alphabet, Apple, Nvidia, and Microsoft. Subversive’s portfolio manager, Christian Cooper, asserted that while they still believe Meta’s priorities are flawed, they have chosen to shift focus due to the faster development in technologies with higher potential, such as AI.
The closure of the ‘PUNK’ ETF highlights the volatile and unpredictable nature of the metaverse and related technologies. As a rapidly evolving digital landscape, the metaverse offers opportunities for significant profits but also considerable risks. This case serves as a cautionary tale for investors and companies to thoroughly assess the viability and potential impacts of new technology trends before diving into them. Furthermore, the shift towards AI underscores the ongoing significance and growth potential of this technology in the broader digital economy.