2 ETFs to invest in blockchain without the volatility of cryptocurrencies

(This article was originally written in English on August 12 and translated into Spanish for this issue).

Cryptocurrencies like, or have attracted a lot of attention since Bitcoin was created in 2009. However, the blockchain technology on which these cryptocurrencies are based has many diverse applications beyond this popular market.

Simply put, Blockchain is a record-keeping technology that can be described as a public digital ledger. While in 2018, the global blockchain market was valued at around $ 1 billion, it is expected to reach $ 40 billion by 2025.

Companies using blockchain technology offer investors potential for growth without the volatility seen in cryptocurrencies.

Here we will take a closer look at the emerging blockchain industry and introduce two exchange-traded funds (ETFs) to consider.

Various applications of Blockchain technology

Blockchain is essentially a public ‘document’ where all committed transactions are stored in a list of blocks, which form a chain and contain a verifiable record of every transaction made.

Blockchain is immutable, which means that a transaction cannot be altered once entered.

In the last decade, peer-to-peer digital currencies like Bitcoin have become the most famous examples using blockchain technology. In the future, blockchain applications are likely to affect a wide range of industries such as agriculture, asset management, insurance, healthcare, Internet of things, supply chain management, and commerce. retailer, to name a few.

For example, the Energy Web Foundation is working with energy giants, BP (LON 🙂 and Royal Dutch Shell (LON :), to explore how blockchain technology can be used in the energy sector.

Several large pharmaceutical and biotech companies, such as AbbVie (NYSE :), Pfizer (NYSE 🙂 and GlaxoSmithKline (LON :), have been collaborating to promote and lower the cost of drug discovery through increased use of blockchains.

Some global banks and financial institutions, including JPMorgan Chase (NYSE :), HSBC Holdings, and Visa (NYSE :), are investigating the potential use of blockchain-based banking solutions.

Grocery stores and food manufacturers, including Walmart (NYSE 🙂 and Unilever (LON :), are exploring how blockchain could help them keep track of food in the supply chain.

With so much potential for how blockchain technology can benefit industry giants, these 2 blockchain ETFs should be on your radar:

1. Amplify Transformational Data ETF

Current price: $ 23.46.
52-week range: $ 13.04-24.41.
Dividend yield: 1.64%.
Expense ratio: 0.70% per year, or $ 70 on a $ 10,000 investment.

Amplify Transformational Data Sharing (NYSE 🙂 invests at least 80% of net assets in shares of companies that are active developers and users of blockchain technologies.

The top five sectors (by weight) are software and services (30.9%), diversified finance (20.5%), media and entertainment (19.9%), retail (9.8%), and banks (8 ,one%).

BLOK, whose net assets are around $ 112 million, has 55 shares. The top five companies are Galaxy Digital Holdings (TSX: GLXY), Square (NYSE: NYSE :), Gmo Internet (T: 9449), Z Holdings (OTC: YAHOY) and Kakao Corp (KS: 035720). These five companies represent close to 24% of the fund’s total holdings.

So far this year, BLOK is up more than 25%. However, since the lows seen in March, the fund has risen by more than 80%, so $ 1,000 invested in early spring would now be worth around 1,800. On August 5, BLOK reached an all-time high of $ 24.41.

The companies in the fund come mainly from Asia-Pacific (45.9%) and North America (43.5%). Potential investors should carefully study the fund’s companies, as well as their products and services, before committing new capital to BLOK.

2. Goldman Sachs Finance Reimagined ETF

Current price: $ 64.18.
52-week range: $ 38.81-65.73.
Dividend yield: 0.66%.
Expense ratio: 0.50% per annum or $ 50 on a $ 10,000 investment.

The Goldman Sachs (NYSE 🙂 Finance Reimagined (NYSE 🙂 ETF, which has 119 positions, tracks the Goldman Sachs Finance Reimagined index.

GFIN offers exposure to companies that it believes are innovative within the financial services sector. The top five companies comprise 20% of the fund’s total holdings, which are worth close to $ 30 million. They are Mastercard (NYSE :), Square, Visa, PayPal (NASDAQ 🙂 Holdings, and Fidelity National Information Services.

The five main sectors (by weighting) are information technology (54.0%), finance (34.2%), communication services (4.6%), industrial (4.5%) and real estate (1, 4%).

So far in 2020, GFIN is up 8.5%. However, since the end of March, like BLOK, the fund has soared around 67%.

Those investors who feel that blockchain will become a substantial aspect of financial services may want to do more due diligence.

conclusion

Blockchain technology has increasingly shown itself in a wide variety of applications. Consumers and investors are likely to hear the word ‘blockchain’ more often, as many public and private companies adopt it. Various ETFs can allow market participants to buy shares in companies that are part of the growth of the industry.

(NOTE: If you are interested in the financial products that I mention in the article and cannot locate them in your region, perhaps you can consult your broker or financial manager).