Bitcoin ETFs have gotten the thumbs down from SEC regulators, but ETFs based on their underlying technology are alive and well. Two brand new blockchain ETFs - the Amplify Transformational Data Sharing ETF (BLOK) and the Reality Shares Nasdaq NextGen Economy ETF (BLCN) - both debuted this week amid a lot of hype, a fair amount of concern from the SEC and some questions surrounding exactly how the two funds are different.
You’ll notice right off the bat that neither fund has the word “blockchain” in its name. That’s not by accident, as the SEC came in at the last minute and asked both providers to rename their funds or risk delaying their launch. The SEC’s concern is understandable. In recent weeks, we’ve seen a number of companies make strategic 180 degree turns, add “Blockchain” to their name and see their stock prices skyrocket by several hundred percent. The SEC’s primary concern is that investors are going to invest in a product they don’t really know much about just because it has “Blockchain” in the name, and put themselves at substantial risk of losses. The other concern is that these funds aren’t pure blockchain plays. Both of these funds have names, such as Intel (INTC), JPMorgan Chase (JPM) and Microsoft (MSFT), in their portfolios. While these companies are indeed developing blockchain-related technology, it’s a very small part of their overall business model at the current moment. That being said, the two funds are still being warmly received by investors. Combined, the two funds are going to near $40 million in shares traded on their opening day, and well over that on their second.
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