6 ETFs for Investing in the Blockchain

“The blockchain will change everything more than the internet.” – Brock Pierce

Distributed Ledger Technology (DLT), better known as Blockchain, was introduced to the world along with Bitcoin. While attitudes towards Bitcoin and other cryptocurrencies remain mixed, interest in the underlying technology is clear.

Here’s a look at the exchange-traded funds that offer the opportunity to invest in blockchain technology.

Over the years there have been many projects, experiments, studies and applications based on blockchain. The dizzying list ranges from cross-border payments, to securing medical records, monitoring supply chain and logistics, digital IDs, food security, property and land transfers, tracking of prescribed medicines, the origin of diamonds, tracking of guns to monitoring the Vaccine Supply Chain – Blockchain is common to all of these efforts. Over the years, I’ve covered some of these topics.

A Deloitte survey from 2020: “While blockchain was once classified as a technology experiment, it made the leap from theoretical to practical a long time ago, and many executives recognize it as a true changer that affects the entire organization.” A Gartner survey of blockchain service providers said 14% of companies’ blockchain projects went into production in 2020, up from 5% in 2019, and the growth momentum is expected to continue in 2021.

Global spending on blockchain solutions is expected to grow sharply in the coming years. IDC Projects a five-year CAGR of 48% (over 2020-2024) that would bring global blockchain spending to $ 19 billion by 2024. An estimated $ 6.6 billion will be spent on blockchain solutions in 2021, a 50% increase from 2020.

In addition to direct spending, there is great potential for further gains through the use of blockchain in our economic ecosystem. PwCs “Time for Trust” report stressed that blockchain has the potential to “add $ 1.76 trillion to the global economy and create around 40 million jobs worldwide by 2030”.

Companies that deal with blockchain are of different sizes. Some are smaller companies focused on specific applications and digital assets, while the larger companies offer blockchain-as-a-service, among other resources, to encourage blockchain usage.

ETFs offer a diversified approach to investing in a combination of such companies. Here are six ETFs that investors should consider:

1. BLCN

Launched in January 2018, the Sirene Nasdaq NexGen Economy ETF (BLCN) tracks the Nasdaq Blockchain Economy index. The index follows a modified linearly weighted approach and is composed of companies that use material resources to develop, research, support, innovate or use blockchain technology for their own use or for the use of others. The fund has exposure to more than 70 companies in different countries. The ETF currently manages $ 303.03 million in assets and an expense ratio of 0.68%. It has a low concentration of 17% in the top ten positions which are:

  • International business machine
  • JUICE
  • Accenture
  • Microsoft
  • Nasdaq
  • Fujitsu
  • JPMorgan Chase
  • MasterCard
  • Tencent
  • Overstock

2. BLOK

Next comes the Strengthen ETF for the exchange of transformation data (BLOK)This is an actively managed ETF that primarily invests in companies involved in the development and use of blockchain technologies. BLOK maintains a portfolio of around 50 stocks in different regions, with 70% of its sectoral allocation to software and services as well as diversified financial stocks. The fund has approximately $ 1.07 billion under management and an expense ratio of 0.71%. Currently, 40% of assets are in the top ten positions, including:

  • PayPal
  • MicroStrategy
  • square
  • SBI Holdings
  • Voyager Digital
  • Argo blockchain
  • Galaxy Digital
  • Digital garage
  • Bitfarms
  • Hut 8 mining

3. LEGR

Launched in January 2018, the First Trust Indxx Innovative Transaction & Process ETF (LEGR) Tracks the Indxx Blockchain Index, which is made up of 100 companies that enable and use blockchain technology. The fund invests 90% of its assets in the stocks that make up the index. The company currently holds 101 shares in various regions with 30% and 11% allocations to the US and China, followed by India, Germany, France, Switzerland, Spain, Japan, the UK and Sweden. The fund has $ 93.12 million under management and an expense ratio of 0.65%. The top ten positions are:

  • oracle
  • International business machines
  • P. Moeller
  • China CITIC Bank
  • AT & T.
  • Wipro
  • JUICE
  • Swisscom
  • NVIDIA
  • Accenture

4. DAPP

VanEck Vectors Digital Transformation ETF (DAPP) is a relaunched ETF that tracks the MVIS Global Digital Assets Equity Index, which represents companies involved in the digital asset economies. The fund has a compact portfolio of 26 stocks and has raised $ 24.5 million in a short period of time since launch in April 2021. The fund has an expense ratio of 0.65% and an allocation of 56.98% in the top ten positions.

  • Galaxy Digital
  • square
  • Voyager Digital
  • NVIDIA
  • PayPal
  • Riot blockchain
  • Taiwan Semiconductor
  • Marathon digital
  • Northern dates
  • MicroStrategy

5. COINS

Next comes the Capital Link Global Fintech Leaders ETF (COIN). Before The fund is called Capital Link NextGen Protocol ETF (change with effect from April 6, 2021) and now maps the ATFI Global Fintech Leaders index with a margin of up to 20% to invest outside the index. All audited companies are grouped under two topics: Digital Asset Providers and Solution Providers. The fund has $ 27.06 million under management and an expense ratio of 0.65%. The top ten positions are:

  • Intel
  • NVIDIA
  • PayPal
  • Microsoft
  • oracle
  • Cisco
  • Taiwan semiconductor manufacturing
  • MasterCard
  • Visa
  • Nestle SA

6. BITQ

The newest ETF in this segment is the Bitwise Crypto Industry Innovators ETF (BITQ). The deposit launched on May 11, 2021 and tracks the Bitwise Crypto Innovators 30 Index. At least 85% of the index is focused on pure crypto companies, including bitcoin and crypto trading venues, crypto mining and mining equipment companies, and service providers, while the remaining 15% is large-cap companies with at least one significant company omitted line focuses on the crypto economy.

Last word

Before blockchain can take the world by storm, it must overcome various challenges, such as: B. Scalability, cybersecurity, compliance with established accounting and seamless implementation. That being said, technology has the potential to revolutionize a spectrum of industries by building an ecosystem that offers transparency, immutability, security, and trust.

Information on funds based on fact sheets. Information on the sector weighting, the main components and the assets as of May 13, 2021. The author has no position in the named index. Investors should not view the above information as a de facto recommendation, but rather as an idea for further consideration. The report has been carefully prepared and any exclusions or errors in it are wholly unintentional.

The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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