BlackRock, the world’s largest asset manager, has launched a new exchange-traded fund (ETF) with exposure to the blockchain industry on Sept. 27, called the iShares Blockchain Technology UCITS ETF. For the blockchain industry, it is a good sign as a whole, and shows that there is more and more interest from retail investors towards this industry.
What are the main holdings of Blackrock’s Blockchain ETF?
Most people think that this fund will give direct exposure to blockchain companies, with “75% of its holdings consist of blockchain companies such as miners and exchanges, while the other 25% are companies that support the blockchain ecosystem.” as mentioned by Blackrock. In brief, the fund includes 35 global companies out of a total of 50 holdings, which also includes fiat cash and derivatives, but does not directly invest in cryptocurrencies.
Is it true? We looked at the companies in the fund and here is what we have found:
- While the fund was introduced as blockchain-heavy fund, out of 35 holdings only 18.86% are companies actively involved in blockchain activities :
- Coinbase – 13.20%
- Galaxy Digital Holdings Ltd 4.53%
- Sbi Holdings Inc 0.57%
- Robinhood Markets Inc 0.56%
2. Almost ⅓ of companies in the fund are mainly doing blockchain-related activities such as blockchain mining. Even if those companies are supporting the blockchain ecosystem, however they are still not completely classified as blockchain companies in the ecosystem. Here are the percentages of mining companies in the fund:
- Block Inc 11.40%
- Canaan Adr 4.69%
- Marathon Digital Holdings Inc 11.13%
- Riot Blockchain Inc 10.50%
3. The last third part of the fund consists of cash/derivatives and informational technology (IT) companies which have no direct link with blockchain industry such as Paypal, IBM etc.
- Paypal 4.27%
- IBM 4.10%
- Nvidia Corp 3.98%
- Advanced Micro Devices Inc 3.64%
- Wolters Kluwer Nv 3.23%
While Blackrock’s Blockchain ETF is not a 100% blockchain ETFs yet, we can see that as a positive trend for the industry. However, it also shows that blockchain remains a difficult field to invest in for today’s investors – if it’s not in the cryptocurrencies themselves!
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