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Investments in Blockchain Technologies - Does this make sense to you?

Updated: Jun 15, 2018

Trying to figure out what the blockchain is or how it works is like the olden days of the internet when university students were asking: what's a modem? What's this bits and bytes thing? And why do I need it to do my daily life?

As an investment story, some of the most well-known companies in the world are hopping on the blockchain bandwagon and trying to monetize it. Investors who want to make money on blockchain, need to invest in the companies that are both earning revenues from it today and building the systems that might make for a new revenue stream in the future. It's a combination of long-term bets and very short-term ones, too.

Blockchain, and all that it will become is not just for venture capitalists hunting for the next big start-up. This is not a fad. The yield curve for investors is steep.

Does a blockchain platform need cryptocurrency? No. Is blockchain something that's on the internet? Yes (what isn't?). Is it like one big QuickBooks? Maybe.

We are trying build the best solution to invest in blockchain.

"Twenty years ago you couldn’t really define the internet either. Now you think you can because you can't live your daily life without it," says Matt Markiewicz, managing director of Innovation Shares in New York. "That's going to be the same with blockchain technology. But trying to boil it down in layman’s terms and explain what sectors will benefit is really tough. We are all still figuring this out."

Markiewicz, an iShares alumn from their capital markets team, left BlackRock in May 2015 and helped create Innovation Shares last summer. This week, Innovation Shares launched what would become one of three new blockchain funds brought to the market in a roughly 10-day stretch.

"Blockchain buzz in the financial press helps feed the appetite to invest in companies with exposure to it," Markiewicz says. "We are trying build the best solution to invest in blockchain."

The Innovation Shares NextGen Protocol (KOIN) fund was seeded with $2.5 million and launched on Tuesday. The fund is up half a percent, hardly what most investors have come to expect from anything associated with the word "blockchain." Blockchain is so closely considered bitcoin's cousin, that anything less than a 50% week is a disappointment.

In October, the addition of the word "blockchain" to the name of U.K. tech firm On-Line PLC translated into a 394% gain in one day. Kodak saw a 200+% jump from Jan. 9 to 10 after announcing its foray into blockchain and crypto.

Amplify ETFs and Reality Shares went from the same $2.5 million in seed funding to $40 million almost overnight. Both have over $120 million in assets under management in less than two trading weeks.

Such is the power, and the hype, of blockchain.

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