Investing in Blockchain Via Semiconductor ETFs

As bitcoin soars, investors are hearing more and more about blockchain, the centralized transaction record for all cryptocurrencies. Over the past month, several exchange traded funds issuers have revealed plans for ETFs that are plays on blockchain.

Some existing ETFs offer blockchain exposure as well, including the VanEck Vectors Semiconductor ETF (NYSEArca: SMH). Semiconductor ETFs have recently been durable performers as semiconductor stocks are rebounding to steady the broader technology sector, but that does not mean the gains are over for this suddenly hot group. However, valuations are rising for chip stocks. Some data points indicate the bullishness can continue for chip stocks and the related ETFs.

“Blockchains – often referred to as distributed ledgers – create and enable immutable records that can be cheaply and securely verified by anyone, not just a central authority,” according to VanEck research. “As the technology sees increasing acceptance, its potential is being explored across government entities and numerous industries, including in financial services, healthcare, legal and consumer – anywhere secure recordkeeping is a requirement.”

Big-name diversified technology ETFs also feature semiconductor exposure. For instance, the Technology Select Sector SPDR Fund (NYSEArca: XLK) includes companies from technology hardware, storage, and peripherals; software; diversified telecommunication services; communications equipment; semiconductors and semiconductor equipment; internet software and services; IT services; electronic equipment, instruments and components; and wireless telecommunication services.

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