The most recent bitcoin crash has investors once again reconsidering exposure to one of the most volatile asset classes on the markets. Stepping back to look over a longer time horizon, however, crypto is finishing strong in a year that saw a lot of innovation and growth within the space, from cryptocurrency price gains to ETF launches.
The value of all cryptocurrencies currently in circulation is more than $2.2 trillion, with bitcoin making nearly half of that at $920 billion, reports CNN Business. Despite being down almost 30% from its record highs in November, bitcoin is still finishing the year strong at a 66% year-to-date gain based on current prices around $49,000.
Not to be outdone, ether is also on the rise, with the enormous popularity of the Ethereum network’s smart contracts and NFTs. The ether in circulation currently has a collective value of $475 billion, with prices five times higher than what it started the year with; ether prices are around $4,000 a coin, up from $730 in January.
More and more major players have moved into the space as well, with many institutional investors beginning to invest in crypto spaces this year. The introduction of some of these bigger investors can ultimately help to potentially provide more stability for the space while also benefiting those who are using crypto as a hedge against inflation and rising interest rates.
“Having larger institutions with deeper pockets and steadier hands buying cryptos will help,” said John Wu, president of Ava Labs, an Ethereum-compatible blockchain firm. “They can withstand the volatility.”
The introduction of a number of ETFs within the crypto space this year, including the bitcoin futures ETFs, shows growth and increasing interest by a wider ranger of investors. Experts anticipate more ETF launches going into 2022 as the crypto space continues to grow.
“The next possible step is for additional ETFs for other coins to launch. There probably will be an ether ETF in early 2022,” said Nick Elward, senior vice president and head of institutional product and ETFs at Natixis Investment Managers.
Investing in Crypto Innovation With BLOK
The Amplify Transformational Data Sharing ETF (BLOK), which currently has $1.3 billion in AUM, is actively managed and invests in companies directly involved in developing and using blockchain technology. BLOK was also the first blockchain ETF approved by the SEC and launched in 2018.
The fund invests in companies partnered with or directly investing in companies utilizing and developing blockchain technologies. However, the fund does not invest directly in blockchain technology or cryptocurrencies.
BLOK spreads its holdings across the size spectrum, investing in all market caps. As of the end of September, top allocations within the blockchain industry included transactional at 30.0%, crypto miners at 28.0%, and venture at 10%. BLOK invests across the blockchain landscape, in miners, exchanges, and developers.
Top holdings include Nvidia Corp (NVDA) at 5.18%, Coinbase Global Inc. (COIN) at 4.86%, and CME Group Inc. (CME) at 4.35%.
BLOK has an expense ratio of 0.71% and currently has 50 holdings.
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