The most widely used blockchain network, Ethereum, just underwent its transition to a proof-of-stake consensus mechanism, which should help open up more growth opportunities with its new efficiency.
This, in turn, could translate to more investment interest in Ethereum specifically and have a spillover effect into blockchain technology in general. It could even pry interest away from leading cryptocurrency bitcoin into the runner-up ether.
“The Merge has finally happened, and while bitcoin remains the preferred cryptocurrency of institutions (and one nation-state, El Salvador), Ethereum’s new consensus mechanism – and the scalability that is supposed to go with it – may attract some interest away from its bigger, older brother as the biting cold of the crypto winter continues,” a Coindesk article noted.
According to Digiconomist, Ethereum’s transfer to a proof-of-stake mechanism could provide substantial energy savings. In terms of just how substantial, it could reduce energy consumption by a whopping 99.5%, making the blockchain network more efficient.
Active, Diversified Blockchain Exposure
Investors looking for active global diversification in blockchain opportunities can look to exchange traded funds (ETFs). In particular, the Amplify Transformational Data Sharing ETF (BLOK) is an option.
While the majority of the fund (75%) contains holdings in North America-based companies, the fund also adds a touch of diversification with holdings in Western Europe and Asia Pacific. This allows the fund to gain exposure to growth opportunities abroad where blockchain technology could be utilized to its fullest extent.
As mentioned, the fund features an active management strategy that can flex with the movements of the market by putting holdings in the hands of seasoned portfolio managers. BLOK adds diversified exposure and cryptocurrency exposure without investing in the currencies themselves.
The fund invests in companies partnered with or directly investing in companies utilizing and developing blockchain technology, which is the technology behind cryptocurrencies like bitcoin.
Summary of BLOK’s features per its product website:
- Global equity portfolio of professionally selected companies involved in blockchain technology and indirect crypto exposure.
- An active management approach that could enable the fund to remain flexible, make timely decisions, and identify companies that are best positioned to profit from the developing blockchain technology space.
- Convenience and transparency of the ETF structure.
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