Subversive Capital Shuts Down Metaverse ETF After 30% Loss, Moves Toward AI
After fifteen months and roughly a 30% decline in value, Subversive Capital has announced the closure of its Subversive Metaverse ETF, known by the ticker PUNK, marking another step away from the metaverse trend as investor enthusiasm shifts toward artificial intelligence.
The firm confirmed that the ETF will cease operations and liquidate its holdings after the close of business on May 31, 2023. The move reflects a strategic pivot toward AI, which has rapidly gained investor attention and market momentum in 2023.
From Metaverse Optimism to Reality Check
Launched in January 2022, the PUNK ETF aimed to invest in companies that support the infrastructure and applications of the metaverse — the concept of interconnected digital environments merging virtual and augmented realities.
Unlike most metaverse-themed funds, PUNK took a contrarian stance by excluding and even shorting Meta Platforms, the parent company of Facebook. The firm criticized Meta’s approach, claiming its vision of the metaverse contradicted principles such as democracy, sustainability, and transparency.
Subversive Capital’s fund description stated that “any market cap above zero [for Meta] poses a direct threat to liberal democracy and the survival of the planet.”
Performance and Portfolio
The ETF debuted when Meta stock traded near $300, only to fall below $90 in late 2022 before rebounding to approximately $240 this year. Despite Meta’s partial recovery, the PUNK ETF underperformed, ultimately losing about 30% of its value since launch.
The fund’s portfolio included major technology firms such as Alphabet, Apple, Nvidia, and Microsoft, but this diversified exposure was not enough to offset the overall decline in metaverse-related enthusiasm.
Shift Toward Artificial Intelligence
Christian Cooper, the fund’s portfolio manager, said the firm remains unconvinced by Meta’s long-term strategy and is instead turning its attention to AI.
“We remain convinced that Meta’s priorities are misguided,” Cooper noted. “The rapid progress in artificial intelligence represents a much more promising technological frontier.”
This pivot aligns with the broader trend across the tech and investment sectors, where AI has become the dominant narrative, driven by breakthroughs in machine learning, large language models, and automation technologies.
The Broader Metaverse Retreat
Subversive Capital’s move follows a growing pattern of disinterest in metaverse investments. Tech giants and venture firms have scaled back projects tied to virtual worlds as user adoption and monetization models lag behind expectations.
Still, some analysts believe the metaverse could see renewed growth once VR and AR technologies mature — especially with Apple’s upcoming mixed-reality headset, which could reignite the sector’s momentum.
Conclusion
The closure of the PUNK Metaverse ETF underscores a shifting paradigm in the tech investment landscape. As capital flows away from the metaverse and into artificial intelligence, Subversive Capital’s decision reflects the broader industry sentiment: AI is the next big frontier — and the metaverse may need to wait for its comeback.
