JThe collapse of NFTs, Luna’s death spiral, and falling cryptocurrency prices across the board have impacted ETFs that have invested in and around blockchain technology.
Despite the stream of bad news, there are plenty of reasons for optimism. As Marcus Sotirou, an analyst at digital asset brokerage GlobalBlock, told CNN, “Even though the sentiment is very, very negative right now and everything looks dire, the actual fundamentals of crypto haven’t changed.”
Indeed, there seems to be some reason for optimism. Miners rebound as crypto prices stabilize. Crypto has had several resets in his life and has always come back stronger and better for him. Some pundits, such as Ben McMillan, Founder and Chief Investment Officer at IDX Digital Assets, compared the recent crypto slide to the early dotcom rout, noting that it was “ultimately good for the space.”
“It reminds me of the 2000s, the liquidation of Pets.com and Amazon.com. They were both down more than 80%. One of them went bankrupt, while the other is become an industry leader,” McMillan said, adding that it wouldn’t be surprising to see bitcoin “return to breakeven for the year, maybe even a little positive.”
Blockchain is the key
The “currency” part of “cryptocurrency” obscures the real star — the blockchain. “Ninety-nine percent of cryptocurrencies aren’t trying to be currencies — they’re trying to be assets behind these blockchain networks,” Sotirou noted. “And I think it’s only a matter of time before all companies are integrating blockchain in one way or another.”
ETFs like the ETF Amplify Transformational Data Sharing (BLOK) are likely to thrive in the long term as Blockchain technology continues to come into its own. BLOK invests 80% of its stakes in companies actively involved in the development of blockchain technology.
Blockchain has the potential to meet several societal needs outside of peer-to-peer transactions or storage of digital wealth. Its ability to act as a ledger makes it useful for real-time tracking of goods as they move through the supply chain, allowing companies to queue events within of a supply chain and to optimize them. Given the current state of supply chains, this could help immensely.
Another possible use is in health care. Currently, health suffers from a compartmentalization of data. Different health insurance companies, doctors and specialists struggle to connect, creating a fractured picture of a patient’s medical history. Imagine a world where all kinds of medical data could be securely stored and easily accessed by healthcare professionals while benefiting from privacy-protecting blockchain offerings.
It also has utility in spaces like real estate. Speeding up home sales with a quick financial check could simplify a complex process and reduce the risk of fraud.
There are even potential civic applications for the technology. Taxes immediately come to mind as something that could benefit from the efficiency, timeliness, and privacy protection of blockchain offerings. Even something like voting could be revolutionized. Voting on the blockchain could speed up the process and make it more accessible to larger groups of people, while enabling faster counts.
Cryptocurrencies are also likely to rally, but it’s important to remember that it’s technology that’s going to drive innovation.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.