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Innovation Shares launches AI based blockchain ETF

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Thematic ETP provider Innovation Shares LLC has launched the Innovation Shares NextGen Protocol ETF, KOIN, which it describes as the first ETF to use artificial intelligence to identify and invest in blockchain innovators and adopters. 

KOIN tracks an index designed to give investors exposure to global stocks that are participating in the growth of blockchain technology, which is being applied across a number of industries.
KOIN’s underlying index places stocks in one of four categories based on how they relate to the theme: 1. Cryptocurrency as payment; 2. Mining enablers; 3. Solutions providers; and 4. Adopters.

The index underlying KOIN was constructed utilising a natural language processing algorithm that screens for global stocks that are believed to have a current or future economic interest in blockchain technology. By harnessing the power of textual analysis and artificial intelligence, companies are uncovered that might otherwise be overlooked by traditional analytical research.
“Blockchain is a highly innovative technology, and we’re applying an innovative approach to identifying the stocks leveraged to the theme,” says Matt Markiewicz, Managing Director with Innovation Shares. “Our proprietary patent-pending AI based process allows us to better capture a full range of publicly traded companies that are developing, investing in and utilizing this new protocol.”

Markiewicz notes that blockchain technology has applications that can potentially benefit multiple industries and new use cases are continually being discovered.

“We believe we’ve built a solution that allows investors to gain access to a profound digital resource, one which has the potential to revolutionize the way global trade is conducted, data is secured, supply chains are managed, financial instruments are cleared and contracts are recorded,” Markiewicz says.

The four categories that make up KOIN’s underlying index are defined as follows:
•        Cryptocurrency as Payment: Companies that accept cryptocurrency as payment for goods and services or are developing blockchain payment solutions.
•        Mining Enablers: Companies that either create equipment and/or tools to enable creation of new blockchains or are mining blockchains as their main business.
•        Solutions Providers: Companies engaged as Blockchain as Service providers. They assist businesses and organizations in the creation and implementation of blockchain applications.
•        Adopters: Companies that primarily use blockchain technology to increase operational efficiencies, optimize settlement processes, enhance the customer experience and/or increase data security/integrity.
         
Exchange Traded Concepts will serve as the adviser for KOIN.

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