Making Portfolio’s Buzz – Unblock and Unchain Them

Speaking about giving your portfolios a buzz, had you ridden on the Bitcoin bandwagon starting this time last year (2017), your portfolios would have had a pretty good ride right through mid-December.

Blockchain
Source: https://coinmarketcap.com/currencies/bitcoin/#charts

The price of Bitcoin rallied from $1,030.24 on March 27, 2017, to $8,101.55 recently (March 27, 2018). That’s a buzz of about 700%! But anyone that invested in Bitcoin just a year earlier (March 1, 2016), when the price of a single Bitcoin was $435.10, would have seen a meteoric portfolio supercharge of over 1900% today.

Unblocking Portfolios

Investors can get exposure to the relatively new world of Bitcoin, and its related technologies, in many ways:

  • You could directly invest in the currencies themselves
  • You may invest in the exchanges that trade them
  • You could buy stocks of companies that mine them
  • Or, you could invest in companies that use the technology behind cryptocurrencies

While you certainly would have got a buzz from your investments, had you purchased Bitcoin directly, the journey would have been extremely rocky. Your portfolio would have seen gains as high as 77.64%, and losses of over 55% during a short 3-month spell from Dec 1 2017 to Mar 21, 2018.

This is the type of volatility that few investors (NOT speculators!) might want to see in their portfolios. So, is there a better way to participate in this amazing crypto-trend? Can you really unlock and unblock your portfolio performance, without exposing it to this much volatility?

The answer is: Probably, yes – but with a caveat! Remember, the Bitcoin and crypto revolution is a relatively new concept and therefore, by participating in it, you will be launching your portfolio into largely uncharted waters. A word of caution then: Do not put a large part of your portfolio into crypto-assets!

Blockchain – The Unblocking Play

Although a more fuller discussion is beyond the scope of this post, Bitcoin is powered by an exciting (relatively new!) technology called Blockchain, which has applications beyond cryptocurrencies. Instead of investing in Bitcoin, or in other crypto-currencies therefore, you might want to consider investing in the underlying technology – Blockchain.

One way to do that would be by investing in an ETF – such as Amplify Transformational Data Sharing ETF (BLOK). Although a very recent offering (Jan 2018), the focus of this ETF is a basket of companies that either create Blockchain technology, or that have telegraphed their intention to get involved heavily in its use over the coming years.

Included amongst its 44 holdings are technology companies, like Shopify Inc (SHOP) and Microsoft Corp (MSFT), that are actively involved in Blockchain experimentation. Other companies, like Bitcoin Investment Trust (GBTC) also make the cut.

Source: Stockcharts.com

Another option, to unchain the power of your portfolios, is to invest in an actively-managed ETF, like ARKW Web X.0 (ARKW), which is a broader-based technology basket, with 9% of its holdings in Blockchain-related companies. As at March 27, 2018, this ETF has clocked an impressive 84% NAV increase (from $28.12 to $53.67) over the past one year. With an Expense Ratio of 0.75%, this might be a product to add to your portfolios to make them buzz!

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