cryptodaily.co.uk: Blockchain ETFs remove the downside of excessive volatility in crypto ETFs

  • Thursday, 12 August 2021 09:30
The lack of a Bitcoin ETF in the US is a long-running saga. Many institutions are in the queue with the SEC to get their own particular ETF approved. However, with a Bitcoin or cryptocurrency ETF comes a level of volatility that perhaps some institutions are not happy with. Therefore, a blockchain ETF might well be the way forward for some.  In an article on Investing.com, 2 blockchain ETFs were discussed, together with the advantages for such funds.   In the article, two researchers from ETH Zurich, and Imperial College, London described some of the use cases of blockchain:  “Blockchain as a technology has gained much attention beyond the purpose of financial transactions – distributed cloud storage, smart property, Internet of Things, supply-chain management, health care, ownership and royalty distribution, and decentralized autonomous organizations."  Also, MarketsandMarkets Research highlighted the potential of blockchain:  "The global blockchain market size is expected to grow from US$3.0 billion in 2020 to US$39.7 billion by 2025, at an impressive compound annual Growth rate (CAGR) of 67.3% during 2020–2025."  The article did point out the significant gains to be had in cryptocurrencies, as the following figures bear out:  Bitcoin is up about 57% year-to-date (YTD);  Cardano is up 881% YTD;  Ethereum is up 334% YTD;  Dogecoin is up 5,520% YTD;  Ripple is up 297% YTD.  However, most investors would have trouble with riding out some of the extreme ups and downs of the crypto market, which can see 10 to 30% daily swings, even in some of the biggest cryptocurrencies such as Bitcoin and Ethereum.   The two blockchain ETFs mentioned in the Investing.com article were First Trust Indxx Innovative Transaction & Process ETF, and Capital Link NextGen Protocol ETF.   Both would give exposure to Nvidia, Microsoft, and Oracle. Although each one would invest in the likes of Amazon, AMD, Deutsche telekom, Visa, Mastercard, and Intel, as well as other well-known technology leaders.   According to Investing.com, the First Trust Indxx Innovative Transaction & Process ETF is up 35% over the last year, and the Capital Link NextGen Protocol ETF is up a similar 34%.    Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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