In the Post-FTX World, there is still enthusiasm for crypto
Following the collapse of crypto brokerage firm FTX last year, already battered crypto prices, including bitcoin, fell as some market observers assumed FTX’s demise was a commentary on the wider universe of digital currencies. On that note, it appears that cooler heads ultimately prevailed, and while bitcoin prices recently pulled back after a strong January, enthusiasm and optimism remain in the crypto space. Should these factors increase, exchange-traded funds, such as e.g Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) and Invesco Alerian Galaxy Crypto Economy ETF (SATO).
What is interesting about the post-FTX crypto landscape is that many professional investors, including venture capitalists, are still interested in crypto. It may take some time for that interest to translate into material benefits for assets like BLKC and SATO, but it’s a positive sign to be sure.
“A bunch of high-profile Wall Street investors just got together in a startup that promises to fix a big problem in the crypto industry,” reported Insider. “If it feels like a 2021 headline, you wouldn’t be wrong. And while many of those bets blew up — the most spectacular of which was crypto exchange FTX — that hasn’t stopped Wall Street. If there’s one thing finance companies love, it’s succeeding where others have failed.”
SATO member firms are companies “that are materially engaged in cryptocurrency, cryptocurrency mining, cryptocurrency purchasing, or enabling technologies.” according to Invesco. It confirms that the ETF is not only correlated to crypto prices, but can benefit from more interest and investment in the wider crypto ecosystem on behalf of professional investors.
There are signs that the scenario is about to increase. Take the case of the new crypto broker C3; in theory, professional investors would be worried about investing in such a firm after the collapse of FTX, but the reality is a different story.
“As Insider’s April Joyner reportedsome 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 such as Jump Crypto of Jump Trading Group and Cumberland of DRW ,” according to Insider.
In the case of BLKC, the Invesco ETF provides investors with an interesting mix of crypto-correlated companies and shares of some high-quality firms outside the direct crypto universe, including Nvidia (NASDAQ:NVDA ), Meta Platforms (NASDAQ: META ), and Visa (NYSE: V ), among others others.
For more news, information and analysis, visit Crypto channel.
VettaFi LLC (“VettaFi”) is the index provider for BLKC and SATO, for which it receives an index license fee. However, BLKC and SATO are not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or responsibility 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 materialize. Information on this website should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any product.
