With the 2021 rally in cryptocurrencies, the Global X Blockchain ETF (BKCH) has been a benefactor from the strength of the digital asset world, rising almost 50% year-to-date in its short time on the market.
BKCH seeks to provide investment results that generally correspond to the price and yield performance of the Solactive Blockchain Index, which is an index is designed to provide exposure to companies that are positioned to benefit from further advances in the field of blockchain technology. So with BKCH, investors get access to holdings like cryptocurrency mining company Marathon Digital Holdings and digital currency exchange platform Coinbase.
“Blockchain is one of the most exciting tech trends at the moment,” a Forbes article says. “It is a distributed, encrypted database model that has the potential to solve many problems around online trust and security. Many people know it as the technology that underpins Bitcoin and cryptocurrencies in general.”
Overall, 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.
Looking Ahead to 2022
With blockchain technology permeating through all business sectors, it looks to be commonplace in the long-term outlook. However, what are the trends shaping blockchain technology in the short term?
The Forbes article also examines trends to look forward to in 2022, noting that next year businesses are expected to pour almost $12 billion into blockchain. There’s no doubt that these trends could also pave the way for strength in BKCH.
One of the foreseeable trends relates to the push towards green energy. Marrying blockchain technology with green initiatives could be a more common concept in 2022.
“Blockchains can potentially use a lot of energy and create high levels of carbon emissions – this fact was behind Tesla CEO Elon Musk’s decision to temporarily stop accepting Bitcoin in payment for his cars earlier in 2021,” the Forbes article says, noting that carbon offsetting could be a major trend. “For this very good reason, during 2022, we are likely to see a great deal of emphasis on attempts to ‘greenify’ blockchain.”
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