Two companies have filed to launch blockchain tracking exchange-traded funds (ETFs) late last week, sparking a new derivative market pertaining to distributed ledger technology. On Thursday, Amplify Investments LLC filed for the Amplify Blockchain Leaders ETF, and Reality Shares filed for the Nasdaq Blockchain Economy ETF.
Amplify Investments and Reality Shares Have Filed for Blockchain ETFs
If successful, the funds will be the first ETFs to track the blockchain ecosystem, creating a new market tied to the cryptocurrency sphere.
The proposed Amplify Blockchain Leaders ETF, will comprise an actively managed fund that provides exposure to companies and securities active in the blockchain industry. Amplify Investments LLC is an Illinois-based wealth management firm that offers portfolio management, ETFs, and advisory services
Invoking a metaphor from the gold rush, Amplify ETFs’ chief executive officer, Christian Magoon, stated “we believe there’s a ‘pick and axe’ play here, where we’re not just looking to sell the gold, but also the equivalent of the mining equipment. Bitcoin is just one application for blockchain, the best known one, but there will be all kinds of applications, not just cryptocurrencies. We think it is like the internet was 20 years ago.”
The Proposed Funds May Comprise the World’s First Blockchain ETFs
The proposed Reality Shares Nasdaq Blockchain Economy ETF is a passively managed fund offering exposure to companies operating in the distributed ledger technology sphere. According to Reality Shares’ filing with the Securities and Exchange Commission, the fund “is designed to measure the returns of companies that are committing material resources to developing, researching, supporting, innovating or using blockchain technology for their proprietary use or for use by others.”
Founded in 2012, Reality Shares is a San Diego-based investment firm that is “solely focused on dividend growth investing,” and offers a range of alternative ETFs that pinpoint and capitalize on investment in dividend growth.”
In recent weeks, Bank of America Meryll Lynch expressed its belief that the bitcoin market could come to comprise a $1.6 billion USD market cap. During September it was revealed that Toronto-based Evolve Funds had filed a preliminary prospectus for a bitcoin ETF in Canada.
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Images courtesy of Shutterstock, Amplify Investments, Reality Shares