Why Bitcoin & Blockchain ETFs are Surging
Bitcoin surpassed $19,000 today and is up about 170% year to date. The cryptocurrency is now just slightly below its all-time high of $19,783 reached in December 2017.
Unprecedented monetary and fiscal stimulus has boosted the best-known digital currency as its supply is limited. Interest from billionaire investors like Paul Tudor Jones and Stanley Druckenmiller and wider mainstream acceptance of cryptocurrencies have further fueled the surge.
Last month, PayPal (PYPL) announced the launch of a new service enabling its users to buy, hold and sell cryptocurrency directly from their account. Square (SQ) and PayPal clients are buying most of the new bitcoin supply, per CNBC.
Investors interested in bitcoin and other cryptocurrencies should be aware of the risks before they decide to invest. These are very volatile and usually go through boom-bust cycles. Unlike real currencies, which are issued by central banks, cryptocurrencies have no central bank backing. Further, there have been many instances of hackers stealing bitcoins.
The Greyscale Bitcoin Investment Trust (GBTC) acts as a bitcoin fund but is not an ETF. Several ETF providers have filed for cryptocurrency ETFs, but all those applications have been rejected by the SEC so far. Shares of GBTC, which are eligible to be held in certain IRA and other brokerage accounts, however, usually trade at a premium to their NAV.
Blockchain, the technology that underpins cryptocurrencies, is still very new, and its full potential is not yet known but many experts say it could change the global economy.
There are four blockchain ETFs investors could look at. The Amplify Transformational Data Sharing ETF (BLOK) and the Reality Shares Nasdaq NexGen Economy ETF (BLCN) have gained between 50% and 53% this year. Overstock (OSTK), Square, PayPal, Nvdia (NVDA) and AMD (AMD) are among the top holdings in these ETFs.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Overstock.com, Inc. (OSTK) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
Square, Inc. (SQ) : Free Stock Analysis Report
Reality Shares Nasdaq NexGen Economy ETF (BLCN): ETF Research Reports
Grayscale Bitcoin Trust (GBTC): ETF Research Reports
Amplify Transformational Data Sharing ETF (BLOK): ETF Research Reports
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