New Blockchain ETF Launched
Blockchain, especially related to Bitcoin and alternative cryptocurrencies, has been the hype of 2017.
Many people have asked me: “Should I buy Bitcoin now?”.
My usual answer ranged from “hell no!” to a more polite “it’s a bubble and hype, so only do it with money you are 100% OK to lose”. Since then, the price of Bitcoin has decreased from $19,511 to $10,500.
That is a loss of 46%!
If you have read my post about Risk Reduction then you will know that this means an increase of nearly 100% is required just to break even.
But that does not mean that Blockchain technology is a fad.
Blockchain Technology will stay
Bitcoin might or might not survive, but Blockchain technology is here to stay. But it is still in its infancy – much like the mobile Internet 10 years back.
Here is a short video that explains the basics:
How to invest in Blockchain Technology?
There are two options about how to invest in this emerging technology:
- Research about all companies that develop such technology and then buy selected shares
- Buy an ETF (Exchange Trade Fund) related to this technology
An ETF can be bought and sold like a common stock. The main difference is that it acts as a fund – it bundles several companies into a single product (usually between 6 and 50 different companies). And, there is a cost attached, which is charged as an annual percentage fee.
Just recently, a new ETF has been launched that focuses on Blockchain technology.
The BLOK ETF
It does not call itself “Blockchain ETF”. Instead, its name is “Amplify Transformational Data Sharing ETF”. That’s quite a mouthful.
As it launched on 17th January 2018, there is no historical data available yet. It currently trades at around $22. Its expense ratio (the annual fee I mentioned) is at 0.70%. That’s not cheap, but neither too expensive.
Here are the top 15 companies that are included in this ETF:
Not all is about Technology
You will notice that not all companies listed above are technology companies. The ETF is distributed over multiple industry sectors regarding future applications.
Here is the industry allocation breakdown:
So if you want to invest long-term in this technology, one of the easiest and safest way is to invest in such an ETF.
For sure there will be others launching soon, and it will experience its ups and downs over time. However, choosing the “best” company regarding future technologies is very difficult (not to say impossible) – investing in a fund is the next best thing at low risk.