One of Wall Street’s most notable investment managers with a knack for cryptocurrency is bringing to market a new exchange-traded fund (ETF) using a blockchain. Brian Kelly, founder of the digital asset investment firm BKCM, has partnered with Gregg King of REX Shares to direct a portfolio of around 30 companies that currently use blockchain technology. The ETF will provide financial support to the companies from the ground up.
Kelly said in an interview with CoinDesk, “When I look at the investment landscape, to me blockchain and cryptocurrencies are a once-in-a-lifetime investment opportunity… if I look at every other asset class, to me the most attractive investment is blockchain and cryptocurrency. The growth is explosive [and] the potential is enormous.”
The companies are chosen based on a set of four specifications—those that use blockchains to streamline their practices, companies that use the technology to change how securities are traded, firms that are involved in cryptocurrency mining and startups that work to create a decentralized Internet. The fund is flexible and could be used to support other types of companies in the future.
The fund is already being used to invest in enterprise companies. As it develops, Kelly anticipates that it could be used specifically for blockchain startups. However, the fund won’t be available to directly invest in cryptocurrencies. There is also talk that it could be used for companies that provide regulated securities.
The ETF is open to any U.S.-based brokerage account, even if they live outside of the country. Being an accredited investor is a prerequisite to participation in the ETF.
Kelly created the ETF following the evolution of blockchain technology over the past year. He feels that companies are “finally getting some revenue from blockchain and cryptocurrency,” adding that, “Even a year ago you had a few who were doing it, but they didn’t have significant revenue streams.” The cryptocurrency vet is confident that the fund will become part of a hugely successful portfolio, an assessment he provides due to an increased interest in blockchain-based companies on the part of the banking industry.
Kelly indicated that he isn’t too concerned about the current volatility of the cryptocurrency market. He stated, “With all investments obviously there’s risk, and the volatility of bitcoin versus equities can change, historically bitcoin has been volatile. That being said we don’t know what the future holds—as more people and more investments come into cryptocurrencies those potentially could actually become less volatile.”