Elwood Global Blockchain ETF ($BCHN) recently became the largest publicly traded blockchain ETF on the market with $95.403 million assets under management. This is a big step for BCHN, as they have surpassed BLOK’s Amplify Transformation Data Sharing ETF ($BLOK), which has $86.45 million assets under management, to become the largest blockchain exchange traded fund.
What is a Blockchain ETF?
An exchange traded fund (ETF) is a fund that owns a basket of assets that traders can gain exposure to by owning shares of the ETF. A blockchain ETF gives individuals exposure to companies that are involved in the blockchain and digital currency industries in some capacity without requiring the individual to own shares in the blockchain or digital currency company itself. By allowing individuals to invest in a basket of assets, rather than requiring them to invest in the assets individually, investors can reduce the amount of risk they are taking on in their investments.
BCHN in particular has holdings in Overstock ($OSTK), CME Group ($CME), and Square ($SQ) among many other assets.
Blockchain not BTC
For several years, different companies and institutions have made an effort to get a BTC ETF approved. A BTC ETF would allow investors to gain exposure to BTC without having to hold any BTC themselves. Many believe that this type of investment vehicle would be appealing to institutional investors because it would allow them to gain exposure to BTC without requiring them to hold any BTC themselves/protect their private keys. However, every time a BTC ETF has been proposed, it has been denied by the U.S. Securities and Exchange Commission.
The SEC has not approved a BTC ETF to date because they claim that the digital currency markets have not proved that they are free from significant amounts of manipulation taking place. As far as we know, when it comes to BTC, this is a correct assessment.
The manipulation of BTC
BTC has strayed away from what Satoshi Nakamoto spelled Bitcoin out to be in the Bitcoin whitepaper. There have been many updates to the BTC network that have made it an inefficient means of payment, as well as a protocol that is nearly impossible to build on due to its technical parameters.
On top of that, BTC has no utility. Individuals who hold BTC hope that its price will continually rise; however, they do not take any action that will help BTC become more valuable. That being said, a majority of the activity that takes place in and around BTC is speculation. When all you can do is gamble, it is no surprise that actors might want to step in and manipulate the game so that it works in their favor.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.