Top 3 Blockchain-Based ETFs and Their 5 Mutual Stocks

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5 Blockchain ETFs

Blockchain ETF Market

The hype for blockchain stocks is really high these days. When a new Blockchain ETF is launched in the market, retail investors tend to put their hard earned money in such ETF stocks without any due diligence.

A majority of the time, this is due to a lack of knowledge in blockchain technology. Additionally, the following days and/or weeks may see the same ETF stock fall hard to face down, eating up the naive investors’ money. It is no surprise that companies are running behind what is the current trend in hot markets such as marijuana or blockchain. Companies all over are adopting blockchain to their business models, and sometimes inexperienced retail investors can fall in the trap.

However, there is an imperative need for Exchange Traded Funds or ETFs which look for holdings in businesses which have applied blockchain Technology to assist in overall efficiency among many other following advantages.

3 Blockchain ETFs We’ve Watched Since  Inception in January 2018 

Amplify Transformational Data Sharing ETF(BLOK) launched on 16 January 2018, invests in Equity Asset class, have Total Assets under Management(AUM) of $160.27million. BLOK currently has a Volume of around 54,823.

Reality Shares Nasdaq NexGen Economy ETF (BLCN) also launched on 17 January 2018, do investment in Equity Asset Class, with current AUM of $103.48 million with current Volume of 29,323.

Later on 20 June 2018, along with the above two, another blockchain ETF called Reality Shares Nasdaq NexGen Economy China ETF(BCNA) was also launched. BCNA has a relatively lower AUM of $2.11 million and Volume of 2,100.

Sector-Wise Holdings

BLOK Holdings

Source: Seekingalpha.com

BLCN Holdings

Source: Seekingalpha.com

LEGR Holdings

Source: Seekingalpha.com

To conclude above statistics we can say, in general,  Blockchain ETFs have around 50-60% holdings in companies from the “Technology” sector and around 20-30% holdings in companies from “Financial” sector. This can come in handy for the potential retail investor looking for a similar kind of investment in a big list of blockchain stocks. Creating a Circle of Competence is considered to be one of the main principles of investing.

The above 3 ETFs have some favored stocks which are mutual among the group.

Here are those Blockchain Companies which lie in the Creamy layer of the ETFs’ Current Holdings.

Favorites of These Three Exchange-Traded Funds Filtered From its Top 10 Holdings

AMD – Advanced Micro Devices Inc

Cryptocurrency miners use fast graphics processing units (GPUs) to solve Complex mathematical problems, with an aim to get new digital currencies as a reward. Mining is the vital part of bitcoin transaction or any payment based use case of blockchain technology. Hence, Investors expect a lot from AMD. It has always amazed the market with its innovative and highly efficient products.

TSM – Taiwan Semiconductor Manufacturing Co Ltd ADR

The SemiConductor industry is surging with the rise in new upcoming and prevalent technologies like AI, IoT, Big Data, and Cryptocurrency mining. TSM is responsible for 55% of the World’s Chip Production, mainly from the crypto mining boom. The Company covers around the 10% of its sales from customers like Bitmain and some GPU companies like AMD and Nvidia.

Square Inc

Square Inc. was among the first companies introduce the potential of bitcoin for worldwide quick transactions. The Company has been able to do execute bitcoin to dollar conversion using its point-of-sale system. Most of the Company’s bitcoin trading comes from private, over-the-counter (OTC) desks as compared to the open, public exchanges.

Microsoft Corp

Microsoft is applying blockchain technology on its platforms like Office 365 Outlook, SharePoint Online, Salesforce, Dynamics 365 CRM Online, SAP, and even Twitter. The thesis behind the action is to move customer data from these platforms to the cloud and then to the blockchain. The Company is also into other rising technologies like AI, ML etc. One example of its use case in blockchain technology is Insurwave, which simplifies maritime insurance for shipping hauls carried by Maersk.

Intel Inc

Intel Software Guard Extensions delivers enhanced privacy and security that can help protect blockchain transactions which also help improve throughput and consensus efficiency. Security technologies like Intel AVX-512 and Intel AES-NI are built into Intel Xeon Scalable processors. In order to obtain enhanced performance and efficiency of cryptographic hashing and blockchain security, Solution builders and developers can take advantage of these Security technologies. The Company has also contributed its distributed ledger platform, Sawtooth Lake, to The Linux Foundation Hyperledger project in 2016.

 

Disclaimer

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