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Blockchain ETFs to Win as Bitcoin Hovers Around Record High
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The price of bitcoin hit a new all-time-high on Nov 30, helped by institutional buying. Bitcoin registered its previous all-time high in mid-December 2017. The world's most popular cryptocurrency is up about 160% this year.
Sergey Nazarov, the cofounder of Chainlink, said “rising inflation and increasingly negative views of modern monetary policy are forcing investors to look for alternative ways to preserve the value of their capital,” as quoted on Businessinsider. Let’s see what are the other factors that are driving the cryptocurrency up.
Corporations’ Greater Acceptance
Corporations’ greater acceptance in allowing customers to hold bitcoin and other virtual coins in their online wallets has been favoring the cryptocurrency. PayPal Holdings Inc (PYPL) is one such company which has recently announced this move.
This is great news for bitcoin and rival cryptocurrencies. PayPal's competitor Square (SQ) launched support for bitcoin back in 2018 through its Cash app. Square also bought $50 million in bitcoin in October as part of larger investment in cryptocurrency.
Other companies those accept bitcoins include Microsoft (MSFT), AT&T (T) , Dish Network (DISH) Burger King, Domino’s Pizza (DPZ) , Goldman Sachs (GS) among others. Facebook-backed cryptocurrency Libra has also been rebranded “Diem” in an effort to gain regulatory approval by refurbishing the project in a simpler manner.
Central Bank Digital Currency (CBDC) Concept Spreading
Several central banks are considering the rollout of CBDCs lately. China has been taking serious moves toward no-touch payments. In efforts to match with China, seven major central banks last week set the key principles for issuing CBDCs, per Reuters. China's recent experimental $1.5 million (1.16 million pounds) giveaway of digital yuan to Shenzhen citizens received kudos from currency analysts.
Not only PBOC, other central banks are also walking the same path. Sweden’s Central Bank, Riksbank is conducting a pilot project with Accenture to prepare e-krona. The European Central Bank (ECB) is mulling over the rollout of a "digital euro" for the 19-nation currency club.
A digital, or virtual, euro would be an electronic version of euro notes and coins, it would be a legal tender and guaranteed by the ECB. On Oct 19, Jerome Powell, Chairman of the Board of Governors of the U.S. Federal Reserve, said that the Fed is committed to considering a CBDC but made no final call on it.
How to Play?
Investors cannot lay their hands on a digital currency ETF now, they can definitely familiarize with the concept through blockchain ETFs like Siren Nasdaq NexGen Economy ETF (BLCN - Free Report) , Amplify Transformational Data Sharing ETF (BLOK - Free Report) and First Trust Indxx Innovative Transaction & Process ETF (LEGR - Free Report) .
Also, ETFs offering exposure to the blockchain ecosystem via semiconductor companies that make chips for bitcoin mining (or could make for some potential CBDCs) can be played. The most-popular funds include iShares PHLX Semiconductor ETF (SOXX - Free Report) and VanEck Vectors Semiconductor ETF (SMH - Free Report) .
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Blockchain ETFs to Win as Bitcoin Hovers Around Record High
The price of bitcoin hit a new all-time-high on Nov 30, helped by institutional buying. Bitcoin registered its previous all-time high in mid-December 2017. The world's most popular cryptocurrency is up about 160% this year.
Sergey Nazarov, the cofounder of Chainlink, said “rising inflation and increasingly negative views of modern monetary policy are forcing investors to look for alternative ways to preserve the value of their capital,” as quoted on Businessinsider. Let’s see what are the other factors that are driving the cryptocurrency up.
Corporations’ Greater Acceptance
Corporations’ greater acceptance in allowing customers to hold bitcoin and other virtual coins in their online wallets has been favoring the cryptocurrency. PayPal Holdings Inc (PYPL) is one such company which has recently announced this move.
This is great news for bitcoin and rival cryptocurrencies. PayPal's competitor Square (SQ) launched support for bitcoin back in 2018 through its Cash app. Square also bought $50 million in bitcoin in October as part of larger investment in cryptocurrency.
Other companies those accept bitcoins include Microsoft (MSFT), AT&T (T) , Dish Network (DISH) Burger King, Domino’s Pizza (DPZ) , Goldman Sachs (GS) among others. Facebook-backed cryptocurrency Libra has also been rebranded “Diem” in an effort to gain regulatory approval by refurbishing the project in a simpler manner.
Central Bank Digital Currency (CBDC) Concept Spreading
Several central banks are considering the rollout of CBDCs lately. China has been taking serious moves toward no-touch payments. In efforts to match with China, seven major central banks last week set the key principles for issuing CBDCs, per Reuters. China's recent experimental $1.5 million (1.16 million pounds) giveaway of digital yuan to Shenzhen citizens received kudos from currency analysts.
Not only PBOC, other central banks are also walking the same path. Sweden’s Central Bank, Riksbank is conducting a pilot project with Accenture to prepare e-krona. The European Central Bank (ECB) is mulling over the rollout of a "digital euro" for the 19-nation currency club.
A digital, or virtual, euro would be an electronic version of euro notes and coins, it would be a legal tender and guaranteed by the ECB. On Oct 19, Jerome Powell, Chairman of the Board of Governors of the U.S. Federal Reserve, said that the Fed is committed to considering a CBDC but made no final call on it.
How to Play?
Investors cannot lay their hands on a digital currency ETF now, they can definitely familiarize with the concept through blockchain ETFs like Siren Nasdaq NexGen Economy ETF (BLCN - Free Report) , Amplify Transformational Data Sharing ETF (BLOK - Free Report) and First Trust Indxx Innovative Transaction & Process ETF (LEGR - Free Report) .
Also, ETFs offering exposure to the blockchain ecosystem via semiconductor companies that make chips for bitcoin mining (or could make for some potential CBDCs) can be played. The most-popular funds include iShares PHLX Semiconductor ETF (SOXX - Free Report) and VanEck Vectors Semiconductor ETF (SMH - Free Report) .
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>