The world of exchange-traded funds is seeing an influx of capital from investors focused on blockchain.
As reported by CNBC, $240 million has come into two ETFs focused on the distributed ledger technology as they came to market last week, per data from FactSet. The investment enthusiasm stands in contrast to bitcoin, where the pricing has been, to put it mildly, volatile. At the end of the week, that marquee cryptocurrency had seen its price slip by 7 percent to end at $10,800, citing Coinbase data.
One ETF is Amplify Transformation Data Sharing, which reportedly has holdings in Taiwan Semiconductor Manufacturing and other firms that have seen increased demand from crypto miners and other parts of the digital currency ecosystem. Total assets under management for that ETF stand at nearly $165 million, a huge leap from $2 million earlier in the month. The other ETF is the Reality Shares Nasdaq NexGen Economy. That vehicle’s holdings include IBM, which is at work on its own blockchain offerings. Assets under management have jumped more than nine times to $86 million for that ETF.
In an interview with CNBC, Eric Ervin, CEO of Reality Shares, said that the capital inflows are among “the first in a series of products we’re going to be pushing into the space,” and added that assets would likely top $100 million within a day or two. The executive said that similar leaps in AUM hadn’t been seen since the ETFMG Prime Cyber Security ETF, which came to market long before the news that Sony Pictures had been hacked.
As CNBC reported, “several tiny stocks have skyrocketed” as much as hundreds of percentage points when it was revealed they were adding “blockchain” to their names, or that they were in some way associated with the technology.