Invesco, an American firm, and Elwood, a British digital asset investment company, announced the launch of a blockchain ETF on the London Stock Exchange today. The exchange-traded fund features 48 companies with ties to the blockchain industry, including some – like Square – that have dabbled directly in the bitcoin or crypto space.
The fund is officially called “Invesco Elwood Global Blockchain UCITS ETF.” The purpose of the ETF is to give exposure to a basket of companies who will make real money from the blockchain industry. The announcement is probably a bit of a letdown to those who want direct exposure to cryptocurrencies and associated companies via the stock exchange as soon as possible.
Elwood’s head of business development, Kevin Beardsley, said in the press release:
“These are companies with assets that are well-positioned to capitalize on the emerging opportunities for blockchain. Over time, however, we would expect the balance to shift naturally to companies with more significant direct exposure to blockchain-related earnings as the technology becomes more ubiquitous.”
Despite its UK listing, 39% of the companies are US based. The ETF includes firms like Overstock, Square, and even Verizon. Several of the companies listed in the ETF are massive – like Samsung, whose new Galaxy S10 features a cryptocurrency wallet. A German index maker called Solactive runs the calculations. TSMC is also on the list, the chipmaker who blamed its downturn in revenue in part on Crypto Winter. The fund carries a less than 1% annual fee.
Few of the companies in the fund are blockchain natives. Overstock might arguably be the only “blockchain natives,” given CEO Patrick Byrne’s longstanding support of crypto and their Medici Ventures sidearm.
Square, meanwhile, offers Bitcoin buying and selling through its Cash App but hasn’t quite dived in headfirst.
Firms like Nasdaq, Microsoft, Samsung, and Apple are only more recently entering the space. Private funds like the ones offered by Morgan Creek Digital are probably still the best way to gain exposure to native blockchain efforts.
You can now track the ticker BCHN alongside other crypto-tickers like GBTC. The London Stock Exchange doesn’t yet have much data on the ticker, for obvious reasons. However, initially shares seem to be worth $40 – 500,000 have been issued with a total value of $20 million.
The fund is interesting for the breadth of companies listed. The ETF even lists a major physical mining company, Rio Tinto, as well as Aluminum Corporation of China. This speaks to the many industries that blockchain can have an impact on. Will the next crypto boom stimulate a more general economic surge?
The prospects of an American Bitcoin ETF are still virtually uncertain. The value of Bitcoin itself would play a huge role in such a fund. The SEC has expressed concerns about the legitimacy of market forces within cryptocurrency. Many traders see the prospect of the Bitcoin ETF as the last major hurdle before mass adoption.
Yet, the existence of a Bitcoin ETF wouldn’t seem to have a direct impact on rank-and-file citizens using Bitcoin in daily life. Industry insiders believe that usability remains a major barrier to regular adoption, and some are working on that problem almost exclusively.
Last modified: June 14, 2020 11:11 AM UTC