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Blockchain ETFs
Bitcoin has been soaring this year; up about 1,600% year to date. But many market experts and regulators have warned investors about bitcoin, some even calling it a speculative bubble.
Bitcoin is also notorious for its extreme volatility, but even bitcoin’s harshest critics recognize the extraordinary potential of the blockchain, the technology that underpins bitcoin and other cryptocurrencies. (Read: Bitcoin Skyrockets, Will ETFs follow Futures?)
In simple words, blockchain is a shared, digital ledger that all users can see and but no single user can control.
IBM has an excellent infographicon blockchain. It describes how a blockchain is built: 1) As each transaction occurs, it’s put into a block, 2) each block is connected to the one before and after it, 3) transactions are blocked together and 4) each block is added to the next in an irreversible chain.
The technology is still very new and its full potential is not yet known but many experts say it could change our world.
Not surprisingly, investors are very excited about companies that are poised to benefit from blockchain revolution. Many blockchain related stocks have soared of late. (Read: Ethereum ETF—The Bitcoin Crushing Digital Currency Explained)
Microsoft (NASDAQ:MSFT) , IBM (NYSE:IBM) and Overstock (NASDAQ:OSTK) are among the well-known companies that have invested in this technology but there are many smaller companies that are blockchain pure plays.
The race for blockchain ETFs is heating up with five ETF sponsors recently filing for ETFs that would provide a convenient way to get exposure to blockchain ecosystem.
Reality Shares has filed for an ETF based on the Reality Shares Nasdaq Blockchain Economy Indexthat tracks the growth and development of leading global companies creating and implementing blockchain solutions.
I spoke with, Eric Ervin, CEO of Reality Shares to learn more about this ETF and the underlying index.
Among other things, we discussed the blockchain technology and its transformative potential.
Eric also explained how the index ranks blockchain companies to identify those expected to benefit most from the innovation, adoption, deployment and commercialization of blockchain technology.
Please visit Zacks ETF Centerfor more information on bitcoin and blockchain. And, make sure to write to us at podcast @ zacks.com.
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