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  • Fund watch
  • blockchain
  • digital transformation

This Amplify ETF is being pushed higher by bitcoin

The Amplify Transformational Data Sharing ETF was up by more than 5% last week, and is up over 50% year-to-date, amid news that BlackRock is filing for its own spot bitcoin ETF, as well as rumours that more big banking names will soon enter the space.

  • BLOK soared 50.5% in first six months of 2023, as crypto flourishes again.
  • BlackRock spot Bitcoin ETF could target investors soon if SEC filing is successful.
  • Despite positive growth in 2023, current analyst consensus is to hold BLOK stock.

Last week, the Amplify Transformational Data Sharing ETF [BLOK] rose 5.4% as crypto shares jumped.

In June, Bitcoin rose above $30,000, and is trading at its highest levels in 12 months.

Meanwhile, Coinbase [COIN], the third-largest holding in BLOK and the US’s largest crypto platform, leaped 16.4% last week.

The BLOK fund, founded in 2019, offers exposure to companies that “develop and utilise” blockchain technology.

The sector experienced major losses after the FTX crypto exchange collapsed last November. BLOK’s value crashed 62.4% across 2022.

However, crypto seems to be recovering, and BLOK has soared 50.5% year-to-date.

BLOK’s recent increases coincided with news that BlackRock [BLK], the world’s biggest asset manager, is filing for the US Securities and Exchange Commission’s (SEC) approval of a spot bitcoin ETF.

In addition, there is speculation that several major US financial institutions managing assets worth $27trn are “actively” exploring the crypto space.

In other news, last Thursday Coinbase said it’s asking for an SEC lawsuit against it to be dropped. The court date has nevertheless been set for 13 July. The BLOK fund closed up 2.5% on the day of the news.

Blockchain player Overstock sees stocks fly

The largest holding in the Amplify Transformational Data Sharing ETF as of 3 July is Overstock [OSTK], accounting for 5.69% of assets under management (AUM).

While Overstock is known primarily as an ecommerce homewares retailer, it has invested heavily in the blockchain and crypto space. It holds a 55% share in fintech firm tZERO [TZROP], which trades tokenised digital securities, though the company closed its crypto exchange in March.

Overstock announced its first quarter (Q1) 2023 earnings at the end of April, reporting a fall of 29% year-over-year in net revenues, to $381m. However, shares are up 68.2% year-to-date and up 36.2% in the last week. Last Thursday, the stock spiked 20% as the company announced it is changing its online name to Bed, Bath & Beyond, following its purchase of the collapsed retailer’s intellectual property.

The second-largest holding in the Amplify ETF is data analytics and business intelligence company MicroStrategy [MSTR], with 4.95% of AUM. The company’s shares are up 141.9% year-to-date and up 4% in the last week. In 2020, MicroStrategy said it was adopting bitcoin as its primary treasury reserve asset. It is the largest public corporate holder of Bitcoin.

The company announced Q1 earnings in May 2023, posting revenues up 2.2% year-over-year.

Outlook for crypto promising

On 26 June, Meltem Demirors, chief strategy officer of CoinShares [CS.ST], said: “Many of the largest financial institutions in the US are actively working to provide access to bitcoin and more,” with names like JP Morgan [JPM] and Goldman Sachs [GS] among those potentially expanding their reach.

The world market for blockchain services is predicted to climb from $4.7bn this year to $19.76bn by 2027, according to a report from the Business Research Company.

As Jeff Booth — entrepreneur, technology leader and author of The Price of Tomorrow — outlined on last week’s episode of Opto Sessions, bitcoin could also offer a solution to the problem of inflation.

All eyes will be on the SEC going forward, in particular with regard to its assertion that crypto assets should be classed as securities, and follow US law.

In June, Bloomberg analyst Eric Balchunas suggested the SEC may deliberately favour more mainstream companies: “There’s more speculation… that the future is more BlackRock than Binance or crypto exchanges.”

According to data from TipRanks, among 388 analysts the overall consensus is to ‘hold’ BLOK stock.  An average price target of $26.67 would represent a rise of 17.2% from its last close of $22.75.

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