How to play Boom Blockchain of China (NASDAQ: BCNA) (BABA) (BIDU)


All funds traded on stock exchanges dedicated to securities with blockchain exposure have arrived on the market this year. Almost all of these funds are heavily or exclusively focused on US equities.

The exception is the Reality shares Nasdaq NexGen Economy China ETF (NASDAQ: BCNA), which debuted in June.

What happened

BCNA, the second ETF blockchain in the Reality Shares stable, targets the Nasdaq Blockchain China index of Reality Shares.

This index "is designed to measure the returns of companies in China that are pledging material resources for development, research, support, innovation or the use of blockchain technology for their use or 39; use by others ", according to the issuer.

BCNA is made up exclusively of companies listed in Hong Kong or China, also known as A. shares. ETF holds 31 securities.

Because it is important

Supporting the thesis for BCNA is the potential opportunity of blockchain in China, which goes beyond cryptocurrency.

"China has become the number one global filer of blockchain patents in the last year, with almost two and a half times the next competitor (the United States) and a total of 225 patents," said the CEO of Reality Shares Eric Ervin in a recent note. "His government added blockchain technology to its five-year plan and, in June 2018, advertised the value of blockchain as" 10 times that of the Internet "on CCTV, its national news network, with apparently full government support behind the blockchain and the high number of blockchain patents, there may be an imminent boom in blockchain. "

It is important to underline that the Chinese blockchain industry is largely immune to the country's trade war with the United States and the tariffs that the United States has imposed on China.

"And while China has recently been the target of new US-imposed tariffs, blockchain technology itself will probably escape with minimal negative impact – most blockchain applications are currently concentrated in technology and finance, and these industries they have been largely spared from the commercial war so far, "Ervin said.

What's next

Many blockchain strategies are heavily assigned to technology titles. This is true for BCNA, but the ETF offers exposure to four sectors with weights ranging from 12.6% (industrial) to 42.3% (technology).

Baidu Inc. (NASDAQ: BIDU) e Alibaba Group Holding Ltd. (NYSE: BABA) are among the top 10 holdings of the BCNA.

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