Bitcoin Rally, Crypto Boom Provides Epic Sparks for Blockchain ETFs

Bitcoin supported its recent highlights, reminding investors that it is not moving up in a linear fashion. The good news is the biggest digital currency and some of its cryptocurrency peers are proving that there is legitimacy and staying power for the asset class.

What Happened: The bad news is that, at least for US investors, the timeline for launching a bitcoin exchange-to-exchange fund remains crazy at best and some of President Biden’s appointments may be further mixing those waters.

As long as bitcoin is part of the investing vocabulary every day and until there are related ETFs, investors can revisit blockchain ETFs, such as the Amplify BLOK ETF Transformational Data Sharing,
-2.91%.
In accordance with regulations set out by the Securities and Exchange Commission several years ago, BLOK and its peers cannot use the term “blockchain” in titles, but that’s what these funds are: Blockchain ETFs.

Why It Matters: Investors cite BLOK’s links to the crypto universe. The actively managed ETF had just turned 3 years old and celebrated by adding up to $ 500 million in assets under management.

“Just over three years ago we launched the first actively managed ETFs focusing on the dynamic market segment of blockchain-linked stocks,” said Christian Magoon, CEO of Amplify ETFs. “BLOK has provided additional portfolio diversification to investors through its unique portfolio composition that includes the Bitcoin Investment Trust. We continue to see a bright future for blockchain technology and its many applications. “

Making the milestone all the more impressive and relevant is BLOK’s performance. The fund has more than doubled over the past year and is up 11% to start 2021. Once again, investors are taking notice as BLOK inflows to date are $ 144 million.

What’s Next: Now home to $ 533 million in assets and 55 stocks, BLOK offers bitcoin exposure through a 5.80% weighting to MicroStrategy MSTR,
-5.51%,
one of the more direct equities plays on the digital currency. Secondary plays, such as locations where consumers can buy digital assets, including Square SQ,
-3.10%
and PayPal PYPL,
+ 1.79%
combined for almost 8% of the fund’s weight.

Over 41% of the fund’s components are software names and a further 17% are various financial services firms.

BLOK also offers some firepower through smaller stocks as middle and small-cap names combine for over 42% of the fund’s inventory.

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