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Investing in Blockchain Technology:
ETC Group Blockchain ETF

While Bitcoin is the best-known and first globally-distributed application of blockchain, there are scores of use cases for the technology, the clearest one appearing to be in the realm of financial technologies.

Borsa Italiana London Stock Exchange

The Opportunity

For those unable to access digital asset markets or those simply wanting to take a step beyond, wide-scale, long-term investment opportunities exist in the infrastructure behind the technologies themselves.

$2trn Industry $2trn Industry illustration

Cryptoassets are a $2trn+ industry in terms of raw market cap, but the wider opportunity extends far beyond simple speculation

Digital Assets Digital Assets Mining Mining

Digital asset mining companies expanding from domestic growth markets to overseas listings and upgrading to mature exchanges, especially tech-focused NASDAQ

Payments Payments & Securitization & Securitization

Payments and securitisation expected to take largest slice of blockchain investment between now and 2030

Digital Assets
Trading Digital Assets Trading

Digital asset trading companies are moving out of private ownership and into IPO (eg Coinbase)

Organisational Innovation Organisational Innovation

Business leaders no longer consider blockchain as merely groundbreaking technology but integral to organisational innovation - Deloitte GBS2020

Global Global Banking Regulation Banking Regulation

First global banking regulations for cryptoassets and stablecoins proposed by Basel Committee in June 2021

Solactive ETC Group Digital Assets and Blockchain Equity Index

Powered by Solactive

Global Index Universe

Designed to measure the performance of global publicly listed companies with business operations in the field of blockchain technologies. Solactive determines the composition of the Index by screening available information such as financial news, business profiles, and company publications. All companies that form part of the index must be involved in:

  • Provision of blockchain or blockchain based solutions and services;
  • Production/mining of cryptocurrencies and digital assets;
  • Development and manufacturing of hardware and software technology used in blockchain applications, cryptocurrency and non-fungible token marketplaces;
  • Provision of services to the blockchain technology industry;
  • Digital assets ecosystems;
  • Operation of blockchain farms.

Focus on Pure Play

“Pure-Play” companies operating in the fields of cryptocurrency mining, blockchain technology, or cryptocurrency custody, trading, and exchanges. All companies that qualify as pure-play are selected as index components.

The index is complemented with so-called “Non-pure-play” companies, which are companies that derive substantial revenue and growth from blockchain business or technology, but do not meet the index requirements to be defined as pure-play. Companies in the fields of electronic payment processing or consumer durables are excluded.

Composition & Rebalance

Companies in the index must have:

  • Primary listing on a regulated exchange within the relevant list of developed markets;
  • Market cap of minimum USD 100m;
  • Minimum daily traded volume of USD 1m;

Main weighting per market-cap aspects:

  • Maximum weight for pure play component is 10%;
  • Maximum weight for non-pure play component is 4%;
  • Index is adjusted on a quarterly basis.

ETC Group Blockchain
& Digital Assets Equity UCITS ETF

Digital Asset Exchanges

Cryptocurrency platforms and exchanges engaged in the business of allowing customers to trade and store digital currencies

Pure Play
Coinbase

Digital Asset Mining Operations

Companies in the crypto mining business help building the blockchain – slowly adding data as users make transactions on the network. It involves hard math called hashing (done by computers) and results in a slow accumulation of resources – just like mining for minerals, but earning cryptocurrencies.

Pure Play
marathondh Riot Bitfarms hut8 hive

Blockchain Services and Solutions

Companies that develop solutions and services involving Blockchain Technology, Smart Contracts, and Wallet and Exchange applications, Blockchain Mining Solutions.

Pure Play
galaxydigital dmgblockchain signatureny overstock bitcoingroup

Technology and Infrastructure

Companies that provide technology and solutions, such as equipment and infrastructure to companies involved in the Blockchain industry.

Pure Play
Complementary Non-Pure Play
Nvidia microchip canaan

Software Services

Companies that focus on the development, distribution, and maintenance of software. These companies are complementary and may hold a significant portion of digital assets on their balance sheet.

Complementary Non-Pure Play
MicroStrategy

ETFs: Frequently Asked Questions

About Exchange-traded Funds (ETFs)

In general, an exchange–traded fund (ETF) is an investment vehicle traded on a stock exchange that has a share creation and redemption process allowing it to vary in size of assets and shares. While ETFs trade like stocks they are generally comprised of a basket of holdings. In addition, most ETFs seek to track a published index of securities, which is the same investment approach used by traditional index funds.

Exchange traded funds (“ETFs”) are open-ended investment funds, similar to traditional managed funds, that are traded on a stock exchange – just like any share. Generally, ETFs aim to track as closely as possible the performance of a given index or asset class.

ETFs are transparent, liquid, cost-efficient and flexible investment tools, designed to be attractive to both individuals and institutional investors.

The first ETF began trading in 1993. ETFs today number in the 1000’s globally with over $2 trillion in funds under management.

ETFs seek to provide an efficient and convenient way to access baskets of various types of investments from around the world.

ETFs can hold stocks, bonds, futures, physical commodities and even short positions. There are a variety of ways to structure an ETF depending on the type of investments an ETF will hold.

  • Convenience: Anyone with a brokerage account can potentially purchase an ETF.
  • Tax Efficiency: ETFs operate with a unique tax structure that may allow the ETF to have more control over taxation.
  • Transparency: Most ETFs reveal their entire portfolio on a daily basis, allowing investors to know exactly what they own.
  • Flexibility: ETFs can be bought and sold during the trading day, producing more flexibility for investors making transactions.
  • Diversification: Most ETFs are composed of a basket of underlying securities.

Trading & How To Invest In Exchange-traded Funds (ETFs)

Buying and selling ETF shares is identical to buying and selling individual shares of stocks. Investors must have a brokerage account in order to purchase and hold ETF shares. Once the brokerage account is created and funded, a buy order is placed to purchase shares of the specific ETF. Likewise, shares of an ETF may be sold by placing a sale order in the brokerage account. ETFs trade throughout the day, just like individual stocks, thus transactions may occur at any time during normal market hours.

ETC-group ETFs are traded on the London Stock Exchange (LSE) and can be bought or sold like any share during the trading day through a stockbroker, financial adviser or online broker. As such, if you want to purchase a ETC-Group ETF, and already have holdings in shares, you do not need to open a separate trading account.

  • Primary Market Liquidity: ETFs have a unique creation/redemption mechanism, which allows Authorised Participants (APs) to build baskets of ETF shares when demand increases (creation), or disassemble the baskets of ETF shares back into single securities should demand decrease (redemption). This happens in the primary market, and allows the liquidity of an ETFs underlying securities to enhance the liquidity of the ETF.
  • Secondary Market Liquidity: Because they trade throughout the day on an exchange, or in the secondary market, investors can make timely investment decisions and quickly execute based on shifting market conditions.

NAV stands for “net asset value”, and represents the dollar value of the underlying holdings of the ETF less fees, costs and other liabilities. The NAV is calculated daily and published for each product on individual product pages of this website

The NAV/unit of a Fund represents the dollar value of the underlying holdings of the ETF expressed as a single unit value. As a result this is the ‘fair value’ of an ETF which is struck daily as at the end of the day.On the other hand, the market price is the price at which the last trade of the Fund occurred. As there may be gaps between the time that a trade was made and the actual NAV/unit it is recommended that when an investor is looking to determine performance of their Fund they use the NAV/unit history provided on each Fund page

While ETC-Group cannot control or influence the execution of your ETF trade, we would like to highlight the following considerations, for you to keep in mind:

Before placing your ETF trade order, check with your broker (or look at “market depth” if using an online broker) to make sure you have accurate bid-offer information. If there is an iNAV associated with the Fund, you should check this against the price at which you are planning on buying or selling the ETF to make sure you are getting close to ‘fair value’.

It may be prudent to use limit orders rather than market orders to make sure you get the price you are expecting. Limit orders allow investors to specify a buy or sell price and will only get executed at the stipulated price.

Most ETFs are designed to track benchmarks. However a small but growing number of ETFs are actively managed and seek to outperform benchmarks.

Costs Of Investing In Exchange-traded Funds (ETFs)

In general, an exchange–traded fund (ETF) is an investment vehicle traded on a stock exchange that has a share creation and redemption process allowing it to vary in size of assets and shares. While ETFs trade like stocks they are generally comprised of a basket of holdings. In addition, most ETFs seek to track a published index of securities, which is the same investment approach used by traditional index funds.

Like traditional mutual funds, ETFs charge an annual expense ratio. In addition, when buying or selling an ETF there may be associated trading costs, these fees may be levied by your broker or financial advisor with prices set by them. ETFs do not have a sales charge.

In general, any dividends earned by the underlying assets held in a ETC-Group Fund will be passed through to the unitholders.