Toronto Stock Exchange to Trade New Blockchain ETF

The Toronto Stock Exchange (TSX) will list a new blockchain exchange traded fund (ETF) starting Thursday, Bloomberg reported June 20. The Horizons Blockchain Technology and Hardware Index ETF fund will join other ETFs from Harvest Portfolio Group Inc. and Evolve Funds Group Inc.

An ETF is a marketable security that tracks an index, commodity, or basket of assets, that are proportionately represented in the fund’s shares. ETFs experience price changes throughout the day as they are purchased or sold on a stock exchange.

The new ETF’s holdings include companies developing applications related to blockchain such as Hive Blockchain Technologies Ltd., Nvidia Corp., and Digital Realty Trust Inc.

The Horizons ETF, which will be traded under the symbol BKCH, is based on the Solactive Blockchain Technology and Hardware Index, while the fund will focus on hardware and services. Steve Hawkins, co-chief executive officer of Horizons ETFs Management Canada Inc., said in an interview with Bloomberg:

“We don’t know which individual blockchain companies are going to work, we have no idea what the extent of the blockchain applications will be, but we do know people will have to invest in the infrastructure to build out blockchain. It’s going to be these ancillary services to the blockchain technology where the winners are going to be at the end of the day.”

Hawkins told Bloomberg that presently the fund is not looking to invest in $20 mln market cap companies due to the high related risk. “Investors need to be investing in the well-established global infrastructure to blockchain, not necessarily taking risks on the startup blockchain development companies.”

Canada’s first ever blockchain-based ETF, which was initiated by Harvest Portfolios, received approval in February of this year. The fund reportedly focuses on large and small-scale blockchain corporations. According to Bloomberg, the Blockchain Technologies ETF from Harvest Portfolios has lost 25 percent since its launch and declined 17 percent from its issue price of C$10.

Earlier this month, an investment management firm VanEck and SolidX Partners Inc. filed a request to list a Bitcoin-based ETF with the U.S. Securities and Exchange Commission. If approved, the fund’s share price will reportedly be around $200,000 in order to target institutional investors.