The world’s largest asset management has established a blockchain exchange-traded fund (ETF), increasing investors’ exposure to cryptocurrency and blockchain-related companies.
BlackRock has officially established a blockchain-focused exchange-traded fund (ETF) that allows investors to gain exposure to the cryptocurrency and blockchain industries without actually owning digital assets.
The world’s largest asset manager, which presently oversees roughly $10 trillion in assets, announced the addition of the Blockchain and Technology ETF (IBLC) to its iShares product line on Wednesday.
The $4.7 million exchange-traded fund does not directly invest in cryptocurrencies or digital assets, but rather follows a slew of worldwide companies active in the industry.
The ETF is comprised of 41 individual holdings, with Coinbase, a US-based cryptocurrency exchange, accounting for 11.45 percent of the fund. This is closely followed by significant Bitcoin mining companies Marathon Digital Holdings (11.19 percent) and Riot Blockchain Inc. (10.41 percent).
To demonstrate its readiness for potential purchases, the ETF currently holds a solid 9.15 percent cash position in US dollars.
Along with the launch of the new ETF, BlackRock released a paper outlining three key areas of the market that are undergoing persistent transformation.
The report demonstrates BlackRock’s bullishness on the crypto market, claiming that while the majority of emphasis on digital assets is focused on price and volatility, the true potential of blockchain has yet to be fully realised.
“We feel that the bigger opportunity – utilising blockchain technology for payments, contracts, and consumption in general — is undervalued.”
Additionally, the study highlights the adoption of central bank digital currencies (CBDCs), stating that 87 nations are now experimenting with the technology.
Crypto ETFs are gaining traction among institutional investors as a means of investing in the cryptocurrency business.
The debate over a spot Bitcoin ETF has been reignited following a recent Nasdaq survey indicated that 72% of 500 financial advisors surveyed would prefer to put client assets in a spot fund rather than a futures-based one.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.