The latest cryptocurrency fallout from the FTX collapse may be lumping blockchain into the toxic mix. However, blockchain technology can operate exclusively, thereby still having future upside moving forward.
The “crypto winter” could be a long one, particularly after the collapse of cryptocurrency exchange FTX. Bitcoin and other leading cryptocurrencies have been feeling the pangs of a rough 2022, and the FTX debacle is only adding to the pain.
Nonetheless, it’s important to note that the underlying technology of cryptocurrencies, blockchain, can still be of benefit outside the cryptocurrency market. The two are often linked together, but blockchain itself can serve its purpose in a variety of industries other than the crypto market.
If anything, blockchain could come out of the “crypto winter” even stronger. That said, it provides a growth component for investors looking to add to their tech portfolio and obtain more diversification.
“I actually think a lot of positive will come once the dust settles,” said Giuseppe Stuto, the co-founder of 186 Ventures. “People are going to ask themselves what’s worth working on and building, so there’s going to be much more of an intense focus on the right areas.”
Actively Capture Blockchain Upside
In an uncertain market, it’s good to have some flexibility. That means having the ability to change positions in the market when conditions deem it necessary, which can be achieved using active management via exchange traded funds (ETFs) like the Amplify Transformational Data Sharing ETF (BLOK ).
As mentioned, BLOK features an active management strategy that can flex with the market’s movements by putting holdings in the hands of seasoned portfolio managers. BLOK adds diversified exposure and cryptocurrency exposure without investing in the currencies themselves.
Given blockchain’s increasing adoption overseas, getting global exposure adds a touch of diversification to portfolios. BLOK does just that by looking at opportunities outside the U.S.
While the majority of the fund (75%) contains holdings in North America-based companies, the fund also diversifies with holdings in Western Europe and Asia-Pacific, investing in companies utilizing and developing blockchain technology, the technology behind cryptocurrencies like bitcoin. This allows the fund to gain exposure to growth opportunities abroad where this technology can be utilized to its fullest extent.
Per its product website, BLOK features:
- A global equity portfolio of professionally selected companies involved in blockchain technology and indirect crypto exposure.
- An active management approach that could enable the fund to remain flexible, make timely decisions, and identify companies that are best positioned to profit from the developing blockchain technology space.
- The convenience and transparency of the ETF structure.
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