The investment fund giant Blackrock has just launch a new ETF in Europe. The latter will allow European customers to invest in the blockchain sector. Moreover, the financial giant could launch another ETF based on the Metaverse.
What is an ETF?
ETF is an acronym for the English words Exchange Traded Funds, or index funds listed on the stock exchange. They appeared with institutional investors such as pension funds, public bodies and of course banks. The total capital invested in ETFs is estimated at $7.87 trillion. This represents a 500% increase over the last ten years.
According to the definition of the Autorité des Marchés Financiers (AMF), an ETF is “an index fund that seeks to follow the evolution of a stock market index as closely as possible, both upwards and downwards. ETFs are investment funds issued by management companies and approved.
Unlike traditional equity funds, they can be bought or sold throughout the day. That is, they are quoted all the time. The stock market order is made via an intermediary, but you control the price of the order.
The advantage of investing in an ETF is the wide choice of possible investments. Whether in France or abroad, a specific business sector or even an investment strategy, the possibilities are immense. According to the AMF: “ETFs meet the security rules for collective investments”.
Crypto-assets are a risky investment.
Blackrock launches a new ETF in Europe
This new ETF with the somewhat barbaric name ofiShares Blockchain Technology UCITS ETF was launched on September 27. His goal is to : “track the investment results of an index composed of US and non-US companies that are involved in the development, innovation and use of blockchain and crypto technologies.”
BlackRock announced that 25% of the funds are dedicated to companies that support the blockchain ecosystem. On the other hand, the 75% of the funds are for crypto exchange companies and digital asset mining.
The ETF includes 35 companies around the world. In addition, it is important to point out that Blackrock does not invest directly in cryptocurrencies, but in crypto-related companies.
The journalistic platform Finextra reported on September 29. In the latter, Omar Moufti, the strategic director for ETFs at BlackRock said: “it is important to us to give our customers the opportunity to engage with global companies that are leading the development of the emerging blockchain ecosystem“, adding: “We believe that digital assets and blockchain technologies will become increasingly relevant to our customers as use cases grow in scope, scale and complexity.”
What are the majority companies in this ETF?
5 companies alone hold more than half of the investment fund out of the 35:
- Coinbase (13.20%), cryptocurrency exchange platform
- USD Cash (13.00%), fiat currency
- Block (11.40%), fintech specializing in digital payments
- Marathon Digital Holdings (11.13%), a digital asset technology and crypto mining company
- Riot blockchain (10.50%), Bitcoin mining company
For the rest, 23 companies are in the IT sector, 6 in finance, 1 in industry and 1 communication company.
Like many capital-intensive global companies, BlackRock also seems interested in investing in web3.
A September 29 report from Bloomberg tells us that BlackRock has a Metaverse-focused ETF project. This should be titled ETF iShares Future Metaverse Tech and Communications. Additionally, it could encompass: “companies that have products or services related to virtual platforms, social media, games, digital assets, augmented reality and more.”
On February 14, one of BlackRock’s ETF co-founders, Reid Menge, announced that the Metaverse was “a revolution in the making“.
Graph of mentions of Metaverse, esports, virtual reality and 5G in companies (source: BlackRock Market)
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