- March 13, 2019
- Posted by: giancarlo
- Category: Exchanges
The cryptocurrency community continues to wait for a Bitcoin ETF, but in the meantime, they will get to enjoy a blockchain ETF. A blockchain ETF was recently launched on the London Stock Exchange, and it is expected to target companies using blockchain technology.
Invesco introduces a Blockchain ETF
Invesco, a large, US-based investment management firm that is traded on the S&P 500, recently introduced an exchange-traded fund (ETF) on the London Stock Exchange (LSE). This ETF will target blockchain-based companies in an attempt to boost the use of the technology all over the world.
The ETF will initially trial roughly 50 companies that are capable of benefiting from growth in the blockchain industry. Invesco revealed that the ETF would be tracking big companies including Apple, Kakao, Signature Bank, Square, Taiwan Semiconductor Manufacturing Company, the CME Group, Monex Group Intel, Advanced Micro Devices, and many more.
To make this possible, Invesco partnered with Elwood Asset Management, a digital asset firm based in the UK. The product, called the Invesco Elwood Global Blockchain UCITS ETF, started trading on the London stock exchange on March 11, 2019. Solactive AG was hired by Elwood to calculate the ETF index.
The exchange-traded fund will start by following 48 companies that Invesco believe will generate huge earnings from the growth of blockchain technology over the next few years. A proprietary scoring system designed by Elwood was used in determining the companies that the ETF will track.
Invesco’s head of equity product management, Chris Mellor, acknowledged that the distributed ledger technology has what it takes to become one of the leading technologies in the world. He stated that “The potential for blockchain to drive real earnings is huge, but it is often hidden within companies involved in other areas. This ETF offers investors access to companies with real earnings now, but with the added potential of blockchain-related earnings not reflected in their share prices.”
ETF focuses on US, Japan, and Taiwan-based companies
The companies tracked by Invesco Elwood Global Blockchain UCITS ETF are mostly based in the United States, Japan, and Taiwan. According to the data released, 39 percent of the companies are based in the US, Japan contributed 29 percent, while Taiwanese companies make up 12 percent of the lot.
Most of the companies listed are in the information technology sector. Amongst the companies mentioned, 46 percent of them in the information tech space, 23 percent in the financial industry, 9 percent offering communication services, and the consumer discretionary sectors making up 8 percent.
The CEO of Elwood Asset Management, Bin Ren, in his statement pointed out that blockchain technology is slowly becoming very important to various companies in the world but more so to financial service firms. He expects the application of blockchain tech to continue rising in virtually all sectors of the global economy.
Crypto community still waiting for Bitcoin ETF
The launch of the Blockchain ETF is good news for the cryptocurrency community as they continue to wait for Bitcoin ETF. Over the past two years, the United States SEC has either rejected or postponed Bitcoin ETF proposals submitted by several companies. The commission numerously cited that the absence of proper cryptocurrency regulation is one of the main reasons why they are yet to accept the launch of a Bitcoin ETF.
However, cryptocurrency enthusiasts are hopeful that the SEC will soon be approved as countries all over the world are tightening their regulations on digital assets. Last month, investment companies AdvisorShares and Sabretooth Advisors announced that they are currently working on an ETF that would track tech companies, especially blockchain and cloud computing firms.