The BlueStar Fintech index was down 10% in 2021, but is still up 40% within the past few years, highlighting the potential for financial technology (fintech) and the newly launched Direxion Daily FinTech Bull 2X Shares (FNTC ).
When the COVID-19 pandemic first dealt a blow to the capital markets in 2020, one of the sectors looking strong was the fintech industry. With social distancing measures in place, the investor notion was that contact-less payments would rise and companies in the forefront of the disruptive industry would prosper.
Now as the global vaccination effort starts to ease fears despite the latest Omicron variant, the fintech bubble may be losing air, but the potential for growth is always present. Startups focusing on fintech are still seeing strong venture capital funding around the world.
“The global startup fundraising boom has lifted nearly every sector you can name: Edtech took off during the pandemic, software in general got a lift, and even more risky and long-term wagers like space tech and biotech are seemingly doing well in today’s risk-on startup fundraising market,” TechCrunch+ notes. “But no single category or niche in startup land has done better than financial technology, or fintech.”
“Around the world, fintech startups have raised simply astounding amounts of capital, with geographies like Latin America, Africa, North America, and more seeing neobanks, payments companies, new consumer-facing lending services, cryptocurrency on-ramps from the traditional banking world, trading apps, and other sub-sectors raising tectonic rounds from investors hungry to get their own capital to work in the craze,” TechCrunch+ adds.
Double the Exposure to Fintech
Traders sensing bullishness ahead for fintech after a stagnant 2021 can look to FNTC to play future upside. The fund is driven by the Indxx US Fintech and Decentralized Finance Index. It includes companies offering technology-driven financial services, and facilitating a decentralized finance infrastructure, that are disrupting existing business models in the financial services industry in the United States.
Included in the index are the following sub-themes: digital payments, point-of-sale (POS), personal finance software and credit/debit card issuers, tax compliance software and backend payment processing, decentralized finance, financial enterprise solutions, and peer-to-peer lending and crowdfunding. Companies involved in business activities associated with these sub-themes will be eligible for inclusion, and eligible companies deriving a minimum of 50% of their total revenue from these sub-themes will form the selection list.
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