As its mass adoption continues among retail and large institutional investors, getting exposure to cryptocurrencies should be paired with its underlying technology: blockchain.
In particular, exchange traded fund (ETF) investors can get in on this with the Global X Blockchain ETF (BKCH). For crypto investors, getting supplemental exposure to a broad-based blockchain ETF can help complement their digital assets portfolio.
As a Worth article said succinctly: “2021 has seen an explosion in cryptocurrency trading and a huge influx of institutional and private investment in the crypto space. As of August 2021, venture capital funds had invested approximately $17 billion into cryptocurrency and blockchain companies, according to data from PitchBook. This is a record figure, surpassing the total figure for 2020.”
BKCH, which debuted in July, is already up 18% since its inception. The fund seeks to provide investment results that generally correspond to the price and yield performance of the Solactive Blockchain Index, which is designed to provide exposure to companies that are positioned to benefit from further advances in the field of blockchain technology.
BKCH gives investors access to:
- High growth potential: The global blockchain solutions market is expected to increase more than 50% from 2020 to 2021.
- Global tailwinds: Blockchain technology is a global theme, poised to benefit as governments and industries seek to improve the accuracy, transparency, and security of financial transactions.
- An unconstrained approach: This theme is bigger than just cryptocurrency. BKCH invests accordingly, with global exposure across multiple sectors and industries.
BKCH Trending Higher With Big Two Cryptos
While BKCH hasn’t matched the gains of the more volatile big two cryptocurrencies, Bitcoin and Ethereum, it has trended higher along with them. Investors can use BKCH to capture the upside of cryptocurrencies without the volatility of the digital currencies themselves.
Overall, the digital assets space has seen a profound rise in 2021. That strength can be seen directly in hedge funds that concentrate on cryptocurrencies versus other assets like stocks or foreign exchange.
A PYMNTS.com article noted that crypto hedge funds gained 24% during the month of August alone, which trounces the funds that focus on fiat currency trading (0.59%) and stocks (0.8%). As far as the whole year goes, these crypto funds are up about 145%.
“Crypto has two features that make performance potential great for hedge funds involved in it: volatility and inefficiency,” Francesco Filia, CEO of the hedge fund Fasanara Capital, which has invested in cryptocurrencies, told FT. “The combination of the two allows for outperformance of traditional asset classes.”
For more news and information, visit the Thematic Investing Channel.