During a week where US prosecutors indicted the masterminds of a $4 billion crypto pyramid scheme and an auditor hired by a bankrupt Canadian crypto exchange revealed that its "lost" cold-storage wallets had been empty since April (leaving a giant $150 million hole where its customers' money should have been), Wall Street has broken through the crypto news clutter by announcing its latest tentative embrace of 'blockchain technology'.
Just weeks after JPM introduced its own in-house stablecoin, the Financial Times reported Saturday that the world's biggest blockchain-focused ETF will begin trading on the London Stock Exchange on Monday.
The fund will focus on companies with exposure to the emerging technology. companies from Taiwan Semiconductor Manufacturing to more established US-traded companies like Microsoft and Intel. Its total portfolio upon launch will include 48 companies.
The Invesco Elwood Global Blockchain ETF will start trading on the London Stock Exchange on Monday. The ETF will invest in companies such as Taiwan Semiconductor Manufacturing, which supplies cryptocurrency manufacturers with mining chips, and CME Group, the US exchange operator that has pioneered bitcoin futures trading. Other constituents of the ETF, which carries a 65 basis points management fee, include Apple, Intel and Advanced Micro Devices.
Chris Mellor, head of ETF equity product management in Europe at Invesco, said the potential for blockchain to boost earnings was often not reflected in the share prices of companies such as Rio Tinto, the mining company that owns hydroelectric assets that could be harnessed for cryptocurrency mining. The ETF will initially invest in a portfolio of 48 companies based on a proprietary scoring system developed by Elwood Asset Management, a specialist crypto investment boutique backed by Alan Howard, co-founder of the Brevan Howard hedge fund.
Bin Ren, Elwood chief executive, said the possible applications for blockchain extended far beyond cryptocurrencies. “We are beginning to see the technology being used by financial services companies in particular, but we expect greater application of blockchain technology across a wide range of industries,” said Mr Ren.
A handful of other blockchain-focused ETFs have launched in the US and Europe, but most have attracted a small amount of investor capital. The largest, the Amplify Transformational Data Sharing ETF, has about $110 million in assets.
But as interest in blockchain technology intensifies (despite the fact that banks are only now beginning to find niche use-cases for it more than 10 years after its birth), the prospects for a bitcoin ETF remain as grim as ever.