Canada's first blockchain exchange-traded fund is shrugging off Bitcoin's bust and will launch Wednesday as planned.
Harvest Portfolios Group Inc.'s Blockchain Technologies ETF began trading on the Toronto Stock Exchange under the symbol HBLK, amid extreme market volatility that saw the Dow swing more than 900 points in 25 minutes Tuesday after plummeting the most ever Monday.
The Dow's whiplash pales in comparison to Bitcoin, however, which plunged from a high of over $19,000 in mid-December to below $6,000 Tuesday before rebounding.
Investors shouldn't confuse Bitcoin's bust with blockchain's brighter future, analysts at Bloomberg Intelligence wrote. As a technology, blockchain will evolve with new applications, increased transaction speeds and improved security, they said.
HBLK rose 1.9 per cent to $11.36 at 10:04 a.m. in Toronto.
HBLK will invest in a cross-section of large, established companies and emerging businesses that are primarily involved in the development of blockchain technologies, the company said. Its holdings include Hive Blockchain Technologies Ltd., Overstock.com Inc., BTL Group Ltd., and BIG Blockchain Intelligence Group Inc.
Three blockchain ETFs have been created in the U.S., although not without hiccups. Shortly before listing, the U.S. Securities and Exchange Commission encouraged the firms behind the first two funds to drop "blockchain" from their names. The regulator may have been keen to avoid a repeat of recent incidents, like when beverage company Long Island Iced Tea Corp. changed its name to Long Blockchain Corp. and saw its stock price almost triple in a day.
Two of the ETFs, which track companies involved in the digital technology that underpins cryptocurrency transactions, launched on Jan. 17 as the Amplify Transformational Data Sharing ETF, ticker BLOK, and the Reality Shares Nasdaq NexGen Economy ETF, symbol BLCN. Buyers have already poured a combined $264 million worth of assets into both, but they might actually just be paying a hefty price for some pretty basic technology stocks, including Intel, IBM and Nvidia.
Still, investors have pulled $11.4-million from BLOK in the past two days, the first signs of outflows for the fund.
The third fund, known by its ticker KOIN, began trading Jan. 30. The Innovation Shares NextGen Protocol ETF uses "natural language processing" to scan news sources in order to determine sentiment and spot keywords so it can create a portfolio of as many as 60 stocks. As of yesterday, KOIN had about $3.5 million in assets and is down 4.5 percent since trading started.