7 Best Blockchain ETFs of February 2024: Blockchain is like the foundation of digital money,, such as Bitcoin and Ethereum. It’s not just for money,, though. It can change the way we keep records in lots of different areas, like databases and more.
For people who want to invest in the promising technology of blockchain, there are special funds called blockchain exchange-traded funds (ETFs). These funds make it simple for you to invest in many companies that are using blockchain technology. Ruby currency has looked at all the blockchain ETFs out there and sorted them based on how much money they manage.
What Is Blockchain Technology?
A blockchain is like a digital notebook that keeps track of stuff, often transactions involving digital money, but it can record other things too. This notebook is shared among lots of computers in a network. Everyone in the network has the same exact copy of this digital notebook, which makes it tough (though not impossible) for anyone to mess with or cheat the system. Breaking down the word “blockchain” can make it easier to understand how it all fits together.
In simple terms, computers connected in a network encode different kinds of information like contracts, transactions, or supply details into blocks. These blocks are then added to a digital ledger called the chain. Each time a new block is added, all the computers in the network update their copies of the ledger.
Before new data can be added to the ledger, all the computers in the network need to agree that it’s valid.
For example, in some cases, they check that digital coins haven’t been spent multiple times, while for a logistics company, they might verify the shipping details.
What Are Blockchain ETFs?
Blockchain ETFs are investment funds that focus on companies using or creating blockchain technology. They include a broader range of assets compared to Bitcoin or crypto ETFs, which mainly track cryptocurrency prices.
Blockchain is not just about cryptocurrencies like Bitcoin and Ethereum. It has many other uses. For example, Walmart’s Canadian branch uses blockchain to automate invoice and payment management for its logistics partners.
Some companies have cryptocurrency. For instance, MicroStrategy and Tesla own a lot of Bitcoin and other digital money.
There are also places where you can trade or mine cryptocurrency. Coinbase is a popular exchange, and Marathon Digital mines Bitcoin.
Certain companies handle crypto assets linked to blockchain. Galaxy Digital Holdings is one of them.
Tech companies provide hardware for blockchain systems. NVIDIA Corp makes microchips used in supporting these systems.
Why Invest in Blockchain ETFs?
Blockchain technology is still new and exciting, but it’s not fully developed yet. While cryptocurrencies like Bitcoin have been getting a lot of attention for their big wins and losses, other practical uses for blockchain haven’t gotten as much notice.
Some big companies are trying out blockchain, but smaller ones are really embracing it. So far, though, there hasn’t been one standout use of blockchain that shows it’s going to be a huge part of the future of business and tech.
Investing in just a few companies that focus on blockchain or cryptocurrency can be very risky. So, instead of putting all your money into one or a few of these companies, it’s safer to invest in a diversified blockchain ETF. These ETFs invest in many different stocks, which helps spread out the risk.
With the blockchain industry changing so quickly, picking a blockchain ETF for your investments might be the smartest move.
Disclaimer: The information on this website isn’t meant to be taken as advice for investing money. Investing involves uncertainty, and there’s a chance you could lose your money when you invest.