Following the collapse of crypto brokerage firm FTX last year, already battered crypto prices, including bitcoin, tumbled as some market observers hypothesized that FTX’s demise was a commentary on the broader universe of digital currencies. On that note, it appears cooler heads ultimately prevailed and while bitcoin prices recently retreated following a strong January, enthusiasm and optimism remains in the crypto space. Should those factors increase, exchange traded funds, such as the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) and the Invesco Alerian Galaxy Crypto Economy ETF (SATO).
What’s interesting about the post-FTX crypto landscape is that plenty of professional investors, including venture capitalists, remain interested in crypto. It could take some time for that interest to result in material benefits for assets such as BLKC and SATO, but it’s a positive sign to be sure.
“A bunch of high-profile Wall Street investors just piled into a startup that pledges to fix a major issue in the crypto industry,” reported Insider. “If that feels like a headline from 2021, you wouldn’t be wrong. And while plenty of those bets blew up — the most spectacular of which was crypto exchange FTX — that hasn’t stopped Wall Street. If there is one thing that finance firms love, it’s being successful at something where others have failed miserably.”
SATO member firms are companies “that are materially engaged in cryptocurrency, cryptocurrency mining, cryptocurrency buying, or enabling technologies,” according to Invesco. That confirms the ETF is not only correlated to crypto prices, but could benefit from more interest and investment in the broader crypto ecosystem on behalf of professional investors.
There are signs that scenario is accruing momentum. Take the case of new crypto broker C3; in theory, professional investors would be apprehensive about investing in such a firm following the collapse of FTX, but the reality is a different story.
“As Insider’s April Joyner reported, some of the firms involved in C3’s $6 million seed round include Two Sigma Ventures, Jane Street Capital, Hudson River Trading, Flow Traders, and GoldenTree Asset Management, along with crypto-focused subsidiaries of traditional players like Jump Crypto of Jump Trading Group and Cumberland of DRW,” according to Insider.
As for BLKC, the Invesco ETF provides investors with an interesting mix of crypto-correlated companies and shares of some high-quality firms outside of the direct crypto universe, including Nvidia (NASDAQ:NVDA), Meta Platforms (NASDAQ: META), and Visa (NYSE: V), among others.
For more news, information, and analysis, visit the Crypto Channel.
VettaFi LLC (“VettaFi”) is the index provider for BLKC and SATO, for which it receives an index licensing fee. However, BLKC and SATO are not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing or trading of BLKC and SATO.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.