Two exchange-traded funds that track and invest in the blockchain ecosystem will make their debut later today, in a bid to offer investors exposure to one of the most hotly-watched new technologies in years.
However, ironically, the US Securities and Exchange Commission (SEC) told the first blockchain ETFs in the last minute to tweak their names and erase the word ‘blockchain’.
The regulator insisted on the name changes as investors seem desperate for any kind of blockchain exposure, to the point where many startups that put the word blockchain, or other cryptocurrency terms, into their name have seen their share prices soar.
Analysts compared the trend with what happened during the tech bubble, where many the technology firms got a strong boost just for adding ‘dot-com’ to their brand name.
The fund from Amplify Investments, The Amplify Transformational Data Sharing ETF (NYSEARCA:BLOK), is an actively managed fund that seeks to offer exposure to companies and other securities involved in blockchain. This means that the holdings will be individually selected by a portfolio manager, based on a proprietary ranking system, as opposed to its tracking the performance of an underlying index.
Separately, Reality Shares Nasdaq NexGen Economy ETF (NASDAQ:BLCN) will be a passively managed vehicle that tracks the growth and development of companies involved in creating and implementing blockchain solutions.
According to its filing with the SEC: “The Reality Shares fund is designed to measure the returns of companies that are committing material resources to developing, researching, supporting, innovating or using blockchain technology for their proprietary use or for use by others.”