While lauded for its disruptive benefits in facilitating payment transactions for goods or services, blockchain technology is simply not relegated to financial technology (fintech). Social impact groups are also leveraging blockchain to further their own causes.
Ukraine is a prime example of how impact groups are using blockchain (in this case, cryptocurrency). An outpouring of support led to donations in bitcoin during Russia’s initial invasion of Ukraine earlier this year, highlighting the use cases for cryptocurrency apart from a speculative investment or store of value mechanism.
“Ukrainian aid, the fight for reproductive rights and efforts to reverse the effects of climate change have a surprising common theme: They’re all getting aid from groups using blockchain to rally support,” a CNET article said.
One byproduct of blockchain technology is the increased use of decentralized autonomous organizations (DAOs). DAOs allow for the creation of an organizational structure that is free from central government oversight, but are instead governed by users within the blockchain network — the use of DAOs is resulting in versions of non-profit organizations.
“Consider it the blockchain version of a nonprofit,” the article added further. “Impact decentralized autonomous organizations, or DAOs, use crypto tools as a source for public good and an alternative way to support social causes.”
With the use of blockchain technology still in its nascent stages, it opens the pathway for a plethora of opportunities for investment. The question is now how investors can get this level of exposure.
Getting Focused Blockchain Exposure
Because there many ways to get blockchain exposure, an investor can get easily lost in the vast number of opportunities available. As such, an exchange traded fund (ETF) that puts diversification as part of its core strategy can give investors balanced exposure without the overconcentration; consider the Amplify Transformational Data Sharing ETF (BLOK ).
With 50 holdings as of July 29, BLOK adds diversified exposure and cryptocurrency exposure without investing in the currencies themselves. As mentioned, BLOK is actively managed, investing in companies partnered with or directly investing in companies utilizing and developing blockchain technology, which is the technology behind cryptocurrencies like bitcoin.
“The managers focus on how companies can capture the growth, innovation and disruption of the blockchain paradigm shift,” Amplify noted. “The evolution of the internet has changed how people communicate. We believe growth companies that embrace blockchain evolution will capture secular growth trends that are accelerating and disrupting core processes in business.”
Key features of the fund per its product website:
- Global equity portfolio of professionally selected companies involved in blockchain technology and indirect crypto exposure.
- 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.
- Convenience and transparency of the ETF structure.
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