DLT-focused ETFs Gain Traction

Since the beginning of 2018, we’ve seen the emergence of three new ETFs, which put their entire focus on businesses with DLT systems.

by Pavel Velichkov
01 February • 1 min
In News

While Blockchain-focused exchange-traded funds (ETFs) continue to draw investors’ attention, a new kind of ETFs has started to gain traction – those investing in companies that use the distributed ledger technology (DLT) in spheres other than cryptocurrencies, US investment bank UBS writes.

Non-cryptocurrency ETFs can include companies that “directly or indirectly enable the use of DLT products and services as well as companies that could use or stand to benefit from the technology,” says USB, but notes it could be tough for fund managers to find and select the companies to include.

The Blockchain technology is, in fact, a shared public ledger (some people refer to it as a distributed database). Its purpose is to track transactions and to make sure they remain transparent. This technology was actually developed for Bitcoin, but its potential has been noticed by many other companies who try to develop a non-crypto currency DLT and use it differently.

It is widely believed that DLT is the way to go for innovative ledger and data sharing technology, but it might take a while before we witness the technology’s widespread adoption. DLT has so far been successfully applied to e-commerce, food safety, digital media and pharmaceuticals, among others.

 

Since the beginning of 2018, we’ve seen the emergence of three new ETFs, which put their entire focus on businesses that already have had some experience with DLT systems.

Citigroup, Bank of America, IBM, Cisco Systems, Microsoft and Accenture are some of the names that create some of the horsepower behind DLT.