None Dare Call It Blockchain

January 22, 2018  |  Michael Reilly

The SEC allowed two new blockchain ETFs to begin trading last week, and a third one this week — but not before requesting they remove the word “blockchain” from their names due to concerns over the market’s crypto mania.

Reality Shares Nasdaq Blockchain Economy ETF (BLCN)  is now named the Reality Shares Next Gen Economy ETF (BLCN). And the Amplify Blockchain Leaders ETF (BLOK) is listed as the Amplify Transformational Data Sharing ETF (BLOK).

Amplify’s BLOK is actively managed so that, in the words of Amplify ETFs founder and CEO Christian Magoon, the fund can skate “where the puck will be.”

Reality Shares BLCN, on the other hand, is passively managed to track the Reality Shares Nasdaq Blockchain Economy Index (^RSBLCN). According to Reality Shares, each company in the index is given a “Blockchain Score” calculated according to the likelihood it will benefit from blockchain technology.

Yesterday, the First Trust Indxx Innovative Transaction & Process ETF (LEGR) began trading. Another passively managed ETF, LEGR seeks to track an index called the Indxx Blockchain Index (^ILEGR).

Whether actively or passively managed, all three ETFs are holding companies that have potential for big gains tied to big risk.

Most of the companies held in these funds show little in terms of Relative Strength today.  But, once there are a large number of blockchain-related ETFs out there (and we believe that’s right around the corner), we will be reporting on their individual strength relative to each and every other blockchain ETF.

As RS investors, we go where the price momentum takes us today.  Crypto or blockchain related companies make up the universe from which we will select the positions for our model.

The model will buy companies already showing strong relative strength buy signals as we want to capture any upward price behavior that’s happening at the time.

Also, we’re not afraid to call a blockchain a blockchain. In fact, I decided last week to change our model’s name.  It is now more accurately named the “Blockchain Boom Model.

To find out more about Rowe Wealth Management’s Blockchain Boom Model and how it fits with your larger financial goals and personal risk score, click here to talk to us.

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