The rise of cryptocurrencies in 2021 isn’t the only factor that could translate to more strength for blockchain technology, according to Nikolaos Akkizidis, compliance officer and economist at LegacyFX.
Akkizidis cites two primary factors: negative real interest rates and the post-pandemic era.
“The change can happen because the post-pandemic era already creates euphoria and reduce uncertainty by pushing inflation to a positive trend, while the high public debt will continue to force the money market and deposit rates to remain low for a long time,” wrote Akkizidis in a FX Street article. “If uncertainty does decrease and real interest rates remain negative, a scenario that is likely to be confirmed in the distant future, then household depositors, although they will retain most of their cash in deposit bank accounts, are likely to look for alternative deposit forms.”
Blockchain, in particular, will be one of the disruptive technologies that could rock the boat for the way consumers view finance. Decentralized finance, in totality, will be taking aim at the banking sector.
“Cryptocurrencies, blockchain, peer-to-peer decentralized financing, financial commodity, and foreign exchange trading platforms are some of the most shocking examples of a future that has already entered the money and trading market and it seems that it is preparing to change the entire banking and financial landscape,” Akkizidis said.
Strong Start for This Blockchain ETF
Despite a midsummer debut, the Global X Blockchain ETF (BKCH) is off to a strong start with a 20% gain year-to-date. That performance is head and shoulders above a sector index like the Nasdaq Blockchain Economy Index, which is up about 2% on the year.
The fund seeks to provide investment results that generally correspond to the price and yield performance of the Solactive Blockchain Index, which is designed to provide exposure to companies that are positioned to benefit from further advances in the field of blockchain technology.
BKCH gives investors access to:
- High growth potential: The global blockchain solutions market is expected to increase more than 50% from 2020 to 2021.
- Global tailwinds: Blockchain technology is a global theme, poised to benefit as governments and industries seek to improve the accuracy, transparency, and security of financial transactions.
- An unconstrained approach: This theme is bigger than just cryptocurrency. BKCH invests accordingly, with global exposure across multiple sectors and industries.
For more news, information, and strategy, visit the Thematic Investing Channel.