If you want to invest in blockchain technology, but you’re not ready to deal with the wild volatility of Bitcoin and other cryptocurrencies, you’re a bit ahead of the market. Blockchain is an early-stage technology, with few practical applications so far.
that announced blockchain projects last year have struggled so far.
Their stocks spiked and then fell, showing just how volatile this industry can be.
On the other hand, a few companies have created exchange traded funds that invest in a basket of companies that are exploring blockchain.
These ETFs, like Reality Shares’ NexGen Economy ETF or Amplify’s Transformational Data Sharing ETF hold a lot of companies you’ve already heard of like
Those companies are using blockchain to speed up financial transactions, and make industries like shipping more efficient.
Blockchain is still in its early days, and companies are mostly just experimenting with it, so the SEC told the ETF issuers that they couldn’t even use the word blockchain in the names of the ETFs.
But even without using the word “blockchain,” the ETFs were wildly popular when they launched, attracting hundreds of millions of dollars in investments in just the first few weeks.
Blockchain ETFs can shield you from the wild swings of the crypto market, but they are not completely immune from volatility.
In fact, these ETFs tend to have valleys as large as their peaks.
Reality Shares’ China specific blockchain ETF has trended downward since it launched in June 2018. It’s now trading more than 10% below its highs.
Companies That Use Blockchain
If an ETF isn’t quite your cup of tea, you can always invest in specific companies that are using blockchain technology like
Still, it’s important to know that these companies are just starting to use the technology and they make most of their money on other businesses.
The bottom line is that blockchain has the power to revolutionize the way the financial industry and other parts of the economy operate, so keep an eye on new companies announcing they’re exploring the technology.
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