Generally I refrain from back-to-back posts with similar topics but decided to make an exception this week as the moving parts have kicked into high gear. My post last week addressed my uneasiness with cryptocurrency as well as my interest in the underlying blockchain technology. It appears that my view has some support as two blockchain ETFs debuted on January 17th (BLOK and BLCN) and one January 25th (LEGR). This should be followed by KOIN next week. Horizons and Harvest (HBLK) also have ETF applications pending. Grenadier penned a piece on Seeking Alpha that did some analysis on the first two. Four of LEGR’s top five holdings are included in either one or both of the originals so it will probably be similar. David Snowball highlights this sentiment in his piece There’s no idea so dumb that it won’t attract a dozen ETFs stating, “…there are no publicly traded companies that specialize in blockchain; there are mostly companies with a dozen other lines of business that have some sort of efforts going into blockchain.” This is 100% correct.
OWNED / NOT IN A BLOCKCHAIN ETF
I’ve provided my companies, date purchased, gain and ETFs owning them. As the technology – and space – is rapidly evolving, this list is is subject to change. Check the respective ETF prospectuses for their actual and total holdings. Personally, I own a fair representation – but not all – of this space.
MY BLOCKCHAIN COMPANIES
|Visa Inc./V||6 Jan 2015||63.15%||BLCN,BLOK|
|PNC Financial Services/PNC||6 Jan 2015||46.94%||BLOK|
|Bank of NY Mellon/BK||24-Dec-2015||22.45%||BLOK|
|MasterCard Cl A/MA||24-Dec-2015||47.43%||BLCN,BLOK|
|Goldman Sachs Group/GS||24-Dec-2015||24.42%||BLCN,BLOK|
|Bank of America Corp./BAC||24-Dec-2015||47.75%||BLCN|
|State Street Bank/STT||24-Dec-2015||33.41%||BLCN,BLOK|
|Cboe Global Markets/CBOE||14-Dec-2017||8.0%||BLOK|
|CME Group Inc./CME||14-Dec-2017||1.9%||BLCN,BLOK|
|Cognizant Tech. Sltns./CTSH||14-Dec-2017||9.46%||BLOK|
|JP Morgan Chase & Co./JPM||14-Dec-2017||9.56%||BLOK|
|NOTE: Dec 2017 purchases have two dividend offsets so far
As always, the question is, “How much room is left for these puppies to run” and are these ETFs late to the party? If a recent Morningstar report is correct, the prediction is for a 54.5% CAGR between 2017 and 2023 in the blockchain space. Yet a Harvard Business Review article best illustrates the challenges to accelerated adoption.
Regardless, these are all companies that pay a dividend, have seen an impact on their stock price due to blockchain euphoria, yet are not dependent on blockchain or cryptocurrency for their ongoing success.
As always, just my personal worldly observations and next week we return to our regular programming with month end results (already?).
Update 29 Jan 2018: During week 1 of operation, these ETFs experienced $240 million inflows