There are several key differences between blockchain ETFs and crypto investments
With the rise of cryptocurrencies, a variety of related industries have emerged as viable options for investors looking for long-term investments. ETF (Exchange-Traded Fund) is one of them. Blockchain ETF is a type of stock exchange fund that invests in companies using blockchain technology. They are a relatively new concept but are gaining traction. Blockchain-focused stocks operate or profit from the development and application of blockchain technology. Investing in cryptocurrencies, as opposed to blockchain ETFs, is relatively straightforward. Investors choose a coin or token and if they believe it has potential, they will directly invest in it and in return will receive a digital asset of equal value.
On the other hand, when investors invest in a blockchain ETF, they don’t “buy” anything. The prospect of progress is what they put their money in. Furthermore, blockchain ETFs do not refer to the money of a certain company or product. Rather, it is about all businesses that are connected to blockchain technology in some way or rely on it for profit.
There are several other key differences between blockchain ETFs and crypto investments. They are:
– Blockchain ETF primarily tracks the stock prices of companies that have invested in blockchain technology in their funds.
Blockchain ETFs buy shares of companies just like any sector or thematic fund.
– Many blockchain funds do not buy crypto. In fact, the funds that buy these coins are crypto ETFs.
Blockchain ETF is a new phenomenon with only a few dozen such funds operating globally.
In its current form, blockchain ETFs are relatively less volatile than cryptocurrencies.
Blockchain is the underlying technology by which coins are traded and their records maintained in a decentralized manner. For example, Bitcoin is based on the blockchain technology of the same name, and Ether, this coin, is based on the Ethereum blockchain.
