After Bitcoin ETF, will Blockchain ETF be just as Successful?

Paigambar Mohan Raj
Source: Coindesk

The world’s largest asset manager, BlackRock, has introduced a Blockchain and Tech ETF (IBLC) to its iShares product line. The move has been made in the hopes of providing customers with more exposure to crypto and blockchain-related firms. The announcement was made on Wednesday, 27th of April.

The launch of the blockchain exchange-traded fund (ETF) will allow customers to engage in crypto and blockchain technologies, without having to own any digital assets.

The $4.7 million ETF does not hold cryptocurrencies or digital assets directly but rather follows a number of worldwide firms active in the industry.

The ETF is made up of 41 different assets, with US-based exchange, Coinbase, accounting for 11.45% of the total. Bitcoin mining firms, Marathon Digital Holdings, and Riot Blockchain Inc. constitute 11.19 % and 10.41% of the total holdings, respectively. The ETF also holds a 9.15% US Dollar cash position.

BlackRock also published a report highlighting its bullish outlook on the crypto industry. The report brings to attention three areas of the market that are currently undergoing permanent changes, namely industry, health, and consumer.

Will the BlackRock blockchain ETFs take off?

Blockchain ETFs invest in equities of companies that utilize or develop blockchain technology. They invest in a broader range of assets than Bitcoin ETFs or crypto ETFs, which are focused on monitoring the price of certain cryptocurrencies.

ETFs, in their very nature, diversify an investor’s portfolio. This helps in bringing risks down. It is extremely dangerous to invest in the stocks of only one or a few blockchain or crypto-focused firms. As a result, investing in a diversified blockchain ETF is a safer method to gain exposure to the industry.

Crypto ETFs are growing in popularity among institutional investors daily. Within the first 15 minutes of listing, BetaShares’ crypto exchange-traded fund (ETF) broke Australian Securities Exchange (ASX) records.

Blockchain ETFs allow investors to put their money into the very backbone of the crypto industry, i.e. the blockchain. Also, given how quickly the blockchain market is expanding, adding a blockchain ETF to your portfolio may be the greatest way to invest in the space.