Data Structure
Networking
RDBMS
Operating System
Java
MS Excel
iOS
HTML
CSS
Android
Python
C Programming
C++
C#
MongoDB
MySQL
Javascript
PHP
Physics
Chemistry
Biology
Mathematics
English
Economics
Psychology
Social Studies
Fashion Studies
Legal Studies
- Selected Reading
- UPSC IAS Exams Notes
- Developer's Best Practices
- Questions and Answers
- Effective Resume Writing
- HR Interview Questions
- Computer Glossary
- Who is Who
Blockchain ETFs Vs Bitcoin ETFs: What’s the difference?
Introduction
Even though the cryptocurrency bitcoin has acquired popularity among investors, bitcoin exchange-traded funds (ETFs) remain a pipe dream. Meanwhile, blockchain exchange-traded funds (ETFs) have made their debut in mainstream markets. The terms bitcoin and blockchain occasionally used interchangeably in mainstream and news media stories. As a result, even though blockchain ETFs and bitcoin ETFs are independent financial vehicles, they are frequently confused.
To grasp the distinction between bitcoin ETFs and blockchain ETFs, you must first comprehend the gap between the technologies they monitor. Even though a blockchain is the underlying technology of a cryptocurrency, Bitcoin is a cryptocurrency. When it comes to financial instruments, this distinction becomes quite essential.
ETF for Bitcoin
Bitcoin ETF refers to a bitcoin exchange-traded fund; the security exchange commission holds most of a bitcoin exchange-traded fund. These ETFs planned to analyze the spot value of bitcoin using bitcoin futures contracts. Of course, we've all heard that bitcoin futures contracts are traded on the CME.
Bitcoin ETFs are very young, with the first ETF becoming online in October 2021. The biggest bitcoin ETF lags behind the market valuation of bitcoin futures contracts, closely linked to the price of cryptocurrencies in the coming months. The Securities and Exchange Commission, me SEC, can license or prohibit any bitcoin ETF. The SEC granted permission to the Pro shares bitcoin ETF.
ETF for Blockchain
The core purpose of a blockchain ETF is to examine the market valuation of firms whose equities have been listed. The Blockchain ETF monitors the market valuation of corporations investing in blockchain-based startups.
Blockchain is a self-contained technology that cannot be influenced by government authority. Blockchain may exist independently of bitcoin, but bitcoin cannot exist without blockchain technology. Blockchain investments are not limited to a single industry.
Blockchain ETFs Vs. Bitcoin ETFs
Bitcoin ETFs
- Bitcoin futures contracts are available on every reputable exchange, but cryptocurrency regulations in many countries remain unclear. More and more nations have outlawed bitcoin and other digital currencies. Cryptocurrency rules are growing in tandem with the cryptocurrency sector.
- Bitcoin exchange-traded funds (ETFs) are young, but the number of blockchain ETFs is growing.
- Bitcoin and other virtual currencies have been entangled in several regulatory issues and are closely monitored by government officials.
- You may buy a bitcoin futures ETF from the same broker you use for other ETFs. Search for phrases like "bitcoin" or "crypto" in your broker's ETF screener to find funds connected to cryptocurrencies. You may refine your search by reviewing each fund's management and investing philosophy
Blockchain ETFs
- Blockchain is a game-changing technology that is presently powering several financial models. No government has ever prohibited the use of blockchain technology. However, India just passed a cryptocurrency bill.
- Blockchain technology, on the other hand, is neither prohibited nor under investigation by most regulatory bodies.
- Blockchain exchange-traded funds (ETFs) generally monitor the stock market values of firms that have invested in blockchain technology.
- Various ETFs invest in bitcoin futures, but the Securities and Exchange Commission has rejected several applications for bitcoin spot ETFs.
- Most securities brokerages, including Fidelity, E*Trade, and Robinhood, offer blockchain ETFs. The most straightforward approach to finding these funds is to use your brokerage's ETF Screener and search for "blockchain." This will give you a list of funds to look into further to see if they suit your investing criteria.
Key Difference between Blockchain ETFs and Bitcoin ETFs
- To comprehend the distinction between bitcoin ETFs and blockchain ETFs, it is necessary first to grasp the distinction between the products they follow. A cryptocurrency is Bitcoin, while a blockchain is the underlying database technology. This divergence becomes significant when considering investment vehicles.
- Even though bitcoin futures are now available on the country's largest exchanges, the regulatory position of cryptocurrencies remains uncertain in various areas. Virtual currencies have been entangled in several regulatory fights in recent years, primarily for their participation in illegal activities such as money laundering.
- Blockchain technology, on the other hand, has piqued the curiosity of some individuals in the world of legacy finance, including J.P. Morgan CEO Jamie Dimon. Blockchain technology is not prohibited nor under regulatory examination.
- According to ETF Database, there are presently eight blockchain ETFs trading in regulated markets. These ETFs were all introduced between 2018 and 2021. They have a combined $1.4 billion in assets under management (AUM) as of May 2022, and their expense ratios range from 0.50% to 0.95%.
- Blockchain technology, according to experts, enables organizations that employ it to save costs and streamline operations through decentralization.
- In comparison, most Bitcoin ETFs that have applied to the US market regulator SEC have suggested monitoring the price of Bitcoin using futures contracts traded on the Chicago Board Options Exchange and the CME Group. ETFs under this model watch the price of bitcoin by owning futures contracts.
- The first Bitcoin futures ETF, ProShares Bitcoin Strategy ETF, was launched in October 2021. It monitors futures contracts linked to the cryptocurrency's future price.
Conclusion
Bitcoin ETF and Blockchain ETF always need upgrading to keep up with future market trends. They must concentrate on their weak aspects to break their previous peak. There is no disputing that these have become the next big thing in the bitcoin investing field in terms of investments. Many individuals are interested in investing in these ETFs and profiting significantly. Finally, it all comes down to the investor's needs and expectations from the investment. Make informed decisions and invest wisely!
121 Views
