Important Catalysts for Broader Blockchain Adoption | ETF Trends

Cryptocurrency prices, including those of bitcoin, are proving resurgent of late. Therefore, some investors are renewing their focus on blockchain stocks.

That could be good news for ETFs such as the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC). Proving its ties to crypto prices and exposure to large- and megacap stocks can be beneficial, BLKC is up a jaw-dropping 73.91% year to date as of Nov. 17. A breathtaking showing to be sure, but investors who feel they missed out on the fund’s stellar run can take heart. That’s because some market observers believe long-term blockchain opportunities remain.

Those opportunities are partially due to the emergence of Web3. Both the front and back ends of Web3, particularly the latter, require an assortment of complex technologies. Some of those are purveyed by select BLKC member firms. On that note, it’s worth acknowledging that the Invesco ETF allocates 42.27% of its weight to tech stocks. Many of them are large- and megacap fare, confirming the fund’s course is charted by much more than cryptocurrency.

Web3 Big Opportunity for Blockchain

Investors new to the Web3 thesis may not realize that discretion is important from a technological perspective. That’s a bell answered by some BLKC holdings.

“However, accessibility and simplicity are important for the adoption of Web3,” reported Anthony Clarke for Coin Telegraph. “When the technical complexities of Web3 are too prominently featured on the front end — such as managing cryptographic keys or understanding blockchain concepts — it can alienate a significant portion of potential users. It is important to make the user experience and interactions smooth and easy to understand so that the end-user doesn’t have to worry about the technical details.”

Forcing the most complex of Web3 technologies to the backend — something some BLKC member firms could prove adept at — serves other advantages that bolster the ETF’s longer-ranging thesis. Those perks include enhancing efficiencies, reducing complexities, and luring more developers to Web3 platforms.

“The back-end concealment of Web3 technology has the additional benefit of minimizing user errors and risks. When users are not exposed to technical complexities, there is a reduced likelihood of making critical mistakes, such as mishandling cryptographic keys or engaging in unsafe transactions,” according to Coin Telegraph. “This is especially important in decentralized finance applications, where minor errors can lead to significant financial losses.”

On a related note, BLKC’s second-largest sector weight is financial services, at 22.76%, as of Nov. 17.

For more news, information, and analysis, visit the Crypto Channel.