Learn what a blockchain exchange-traded fund is, how it differs from a bitcoin ETF, and everything else you need to know
Cryptocurrency is now providing Exchange-Traded Funds (ETFs) to its investors (ETFs). For cryptocurrency investors, bitcoin exchange-traded funds (ETFs) are a novel concept. So let inform readers that Blockchain ETFs have entered the mass market. Invesco Mutual Fund stated earlier in the month that the markets regulator SEBI has authorized Invesco CoinShares Global Blockchain ETF FoF. As both a feeder fund, Invesco MF would put money into the Invesco CoinShares Global Cryptocurrency UCITS ETF. This fund’s initial public offering (NFO) was meant to go live on November 24, but then it was delayed due to the unpredictability of India’s cryptocurrency legislation. Although blockchain ETFs and bitcoin ETFs are two independent financial vehicles, many people are unable to distinguish between them. Let’s understand the difference.
– A Blockchain ETF is a stock exchange-traded fund (ETF) that invests in blockchain-related stocks. For example, Bitfirm Ltd., a Canadian bitcoin miner, Coinbase Global, a US crypto exchange, and Microstrategy, the world’s largest crypto holding, have all invested in Invesco, the CoinShares global blockchain UCITS ETF. In the year 2019, this fund was launched. Bitcoin ETFs are relatively young, although the number of blockchain ETFs is growing. Because of their involvement in money laundering, virtual currencies are being scrutinized by regulators in many nations. No regulatory agency has yet to prohibit or study blockchain as a technology.
– The stock market values of firms that also have participated in blockchain technology are tracked by blockchain ETFs. Stocks with blockchain-related activities or that profit from the development and implementation of blockchain technology are known as blockchain-specific stocks. Blockchain technology, as per specialists, allows businesses to cut expenses and streamline operations by decentralizing their processes.
– The majority of bitcoin ETFs that have filed to the US Securities and Exchange Commission (SEC) seeks to track bitcoin’s price via commodity futures trading mostly on Chicago Board Options Exchange and CME Group. Through all the ownership of futures contracts, ETFs follow the price of bitcoin in this paradigm. In October 2021, the first bitcoin futures ETF was created under the bitcoin strategy. It keeps track of bitcoin futures contracts based on the cryptocurrency’s future price.
Credit – Komal Sharma