On the 9th (local time), MarketWatch reported on content to support the claim that ‘blockchain ETF is the answer’, and the Amplify Transformational Data Sharing ETF (BLOK) and Siren Nasdaq Nexgene Economy ETF. (Siren Nasdaq NexGen Economy ETF: BLCN).
In addition to high volatility, there are other risks to cryptocurrencies such as Bitcoin, MarketWatch noted. There were mentions of the risk of hacking and losing the password while holding Bitcoin in a digital wallet, making it impossible to access the account.
In fact, in 2012, an investor lost the password of an account holding 7002 bitcoins, which was widely talked about, which was calculated based on the bitcoin price of $46,777 on September 7, and more than $327 million was lost. that is thrown away
Market Watch paid attention to how BLOK and BLCN, representatives of ETFs that focus on companies using or developing cryptocurrency and blockchain technology, performed compared to Bitcoin in US dollars since their launch in January 2018.
The asset size of BLOK, an active fund, is about $1.3 billion, the largest at the moment. Followed by BLCN, an index-following passive fund with $291 million in assets.
According to market research firm FactSet data, from January 17, 2018 to September 8, 2021, Bitcoin rose 322%, BLOK returned 159%, and BLCN returned 104%.
For reference, during the same period, SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 as a benchmark, recorded a return of 72%, and Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100 Index, recorded a return of 136%. BLOK’s return outperformed QQQ and more than doubled SPY’s.
Meanwhile, if you look at the chart below provided by FactSet, Bitcoin exhibited much greater volatility than these ETFs.
If you look at the flow of the first two years after BLOK and BLCN were released, the volatility of Bitcoin is even more pronounced. From January 17 to December 14, 2018, the value of Bitcoin fell by a whopping 71%, and 18% in its first two years. During the same period, BLCN rose 14% and BLOK rose 1%, and these ETFs were less volatile compared to Bitcoin.
In addition, as shown in the chart above, even when Bitcoin’s plunge in 2018 was prominent, BLCN performed better than Bitcoin as well as BLOK, and performed better in the following two years.
Currently, the top 10 stocks and weights in BLOK’s portfolio are ▲Hut 8 Mining (HUT, 6.9%) ▲MicroStrategy (MSTR, 5.5%) ▲Marathon Digital Holdings (MARA, 4.5%) ▲Paypal Holdings (PYPL, 4.5%) ▲Square (SQ, 4.4%) ▲Hive Blockchain Technologies (HVBT, 3.9%) ▲Galaxy Digital Holdings (GLXY, 3.9%) ▲Nvidia (NVDA, 3.8%) ▲Coinbase Global (COIN, 3.6%) ▲ Bitfarms (BITF, 3.6%).
Amplifier Pie CEO Christian Magun emphasized that portfolio diversification has lowered risk, but acknowledged that BLOK performance is still closely related to Bitcoin. BLOK’s top 10 stocks account for 45% of its total portfolio.
There are usually about 45 companies included in the BLOK portfolio, and they have developed or are researching blockchain technology, so they generate profits directly or indirectly from blockchain technology. Toroso Investments manages the overall investment strategy, including selection of stocks to be incorporated.
The top 10 stocks and weights in BLCN’s portfolio are ▲Huobi Technology Holdings (01611, 2.7%) ▲Coinbase Global (COIN, 2.4%) ▲Accenture (ACN, 2.1%) ▲Square (SQ, 2.1%) ▲Advanced Micro Devices (AMD, 2.0%) ▲Fujitsu (6702, 1.9%) ▲Nvidia (NVDA, 1.9%) ▲Z Holdings (4869, 1.9%) ▲Marathon Digital Holdings (MARA, 1.9%) ▲Nasdaq (NDAQ, 1.9) %)am.
At the end of the second quarter, there were 69 stocks added to BLCN’s portfolio, which tend to hold more stocks than the average BLOK. In addition, it is less concentrated than BLOK because it has less weight per stock. BLCN’s top 10 stocks account for only 21% of the total portfolio.
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