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Monday, March 15, 2021

Blockchain Investing - ETF’s to watch out for

By Century Financial in 'Investment Insights'

Blockchain Investing - ETF’s to watch out for
Blockchain Investing - ETF’s to watch out for

*This performance is only observed with historical backtests and not traded by the company.

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The product and investment ideas do not consider the risk profile and financial position of the recipient and may not be suitable for everyone. Trading in financial markets and use of margin involves a significant risk of loss, which can exceed deposits. Please read the complete disclaimer carefully.

Risks & Assumptions

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The flyer is for information purpose only & does not constitute a BUY | HOLD | SELL recommendation on any of the below mentioned instruments.
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The ETF’s are passively indexed to their respectively underlying. The ETF’s might not show exact one on one correspondence to the price fluctuations in Bitcoin & Ethereum. As a result, the performance of the ETF could differ due to index tracking error.
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As ETF’s are index linked products, investors are exposed to operational risk arising out of the calculation of index.

The market for crypto currencies and block chain investing has entered a new phase with parabolic rise seen in Bitcoin & Ethereum prices. Broader market participation is on the horizon with even large US listed corporate & legacy Wall Street banks endorsing further growth in digital assets market. Apart from the traditional crypto currencies that the investor can look for investing in digital assets space, the below mentioned ETF’s further provide a convenient way for investors looking to invest in this space.

The first 2 ETF’s provide opportunity for investing in companies that have invested in niche & upcoming block chain technologies, the last 2 ETF’S provide investor with a more simply way of gaining exposure to Bitcoin & Ethereum. This is through lower index value of the respective ETF’s achieved through slicing of the large value of these cryptos.

Sr No Instrument Description AUM (in Billions) Last Price 52 W High 52 W Low YTD Returns
1 Amplify Transformational Data Sharing ETF ( $ BLOK) Invests in companies that are engaged into design & development of transformation data sharing technologies including Blockchain as well as crypto miners/equipment makers. Top holdings include Micro strategy, Hive Blockchain, Canaan Inc. $ 1.148 $ 57.32 $ 62.94 $ 13.04 58%
2 Reality Shares NASDAQ Next Gen Economy ETF ( $ BLCN) Tracks index of companies that are dedicated to Blockchain technology/crypto development. Some of the top holdings include Canaan Inc, Galaxy Digital, Square, Baidu Inc. $ 0.301 $ 51.67 $ 52.49 $ 17.55 24%
3 Grayscale Bitcoin Trust ( $ GBTC) One of the first movers in this space, the trust tracks the performance of XBX Bitcoin index. Value of each share corresponds to 0.00009464 Bitcoin $ 37.3 $ 50 $ 57.64 $ 5.50 47%
4 Grayscale Ethereum Trust ( $ ETHE) First publicly quoted Ethereum investment vehicle in the US, the fund tracks the performance of ETX Ethereum index. Value of each share corresponds to 0.0102 ETH. $ 5.7 $ 17.125 $ 24.98 $ 4.5 42%

Summary of Top Blockchain/Crypto ETF’s

Risks & Assumptions
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The strategy might suffer from look-ahead bias which occurs due to the use of information or data in a study or simulation that would not have been known or available during the period being analyzed. This can lead to inaccurate results in the study or simulation.
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Future price movements may not be exactly the same as the historical price movements and this could lead to variation in performance.
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Testing can sometimes lead to over-optimization. This is a condition where performance results are tuned so high to the past they are no longer as accurate in the future.
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The model assumes no slippages in trading. Slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed.
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Drawdowns in actual trading can be higher than the tested system and losses could be significant in the event of leverage.
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Unforeseen events can lead to variation in performance from the tested trading strategy.
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The tested result has been computed with price feeds available from Bloomberg.
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The testing environment has not considered transaction or any other costs.
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Trading indicators used for the purpose of testing has been provided by Bloomberg.
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The strategy might suffer from data mining fallacy, selection bias and backfill bias.

Data Source: Bloomberg
Prices & Statistics as of: 12/03/2021 (US Market Close)

Arun Leslie John
Chief Market Analyst

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