Bitcoin Helps, but There's More to This ETF's Story | ETF Trends

Bitcoin and blockchain are often joined at the hip and with the former rallying, the latter could come back into focus, meaning it’s an ideal time to revisit ETFs, such as the Reality Shares Nasdaq NextGen Economy ETF (NASDAQ: BLCN).

BLCN tracks the Reality Shares Nasdaq Blockchain Economy Index. That index “is designed to measure the returns of companies that are committing material resources to developing, researching, supporting, innovating or utilizing blockchain technology for their use or for use by others,” according to Reality Shares.

Blockchain, the underlying technology that forms the basis for cryptocurrencies, has plenty of other real-world uses. Blockchain itself has been a hot topic with companies like investment firm UBS looking to implement the transactional technology in the financial sector. Other industries, including healthcare and retail, are expected to be major adopters of blockchain.

“An old critique of blockchain ETFs is that these are tech funds in disguise. That bum rap probably isn’t applicable anymore, at least not in the case of BLCN,” according to Nasdaq. “For its part, the Reality Shares fund is compelling because a case can be made it’s actually a fintech ETF because the technology and financial services sectors combine for almost two-thirds of its weight.”

Why BLCN Matters Today

The idea of decentralized currencies goes far beyond bitcoin and Ethereum. Today, all kinds of companies, organizations, and governments are exploring the concept of initial coin offerings, or ICOs.

Businesses and currencies exist for roughly the same purpose: to facilitate the exchange of value. Fiat currencies like the U.S. dollar are positively primitive compared with the promise of blockchain and the emerging token economy, which some technologists have taken to calling an asset operating system.

Blockchain continues to capture investor interest as the technology keeps gaining mainstream attention. According to the World Economic Forum, “10% of the global GDP is predicted to be stored on blockchain platforms by 2027.”

As is being witnessed in the fintech space, the COVID-19 pandemic is providing a runway for blockchain to show the utility of its financial service in markets outside the U.S.

“For investors insistent on blockchain purity, BLCN does offer that, perhaps more so than rival funds in the category due to a multi-factor scoring system. BLCN is rooted in a “blockchain score” that focuses on a company’s blockchain technologies, blockchain technology development, industry group participation, economic impact, innovation, public references, and research and development,” notes Nasdaq.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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