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WisdomTree expands thematic range with a blockchain UCITS ETF

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ETP sponsor WisdomTree has announced the launch of WisdomTree Blockchain UCITS ETF (WBLK). Listed on Börse Xetra and Borsa Italiana, WBLK seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Blockchain UCITS Index (the ‘Index’) and has a total expense ratio of 0.45 per cent. WBLK will list on the London Stock Exchange on 14 September 2022.

The firm writes that the proprietary index leverages WisdomTree’s heritage of innovation and self-indexing and is designed to track the performance of companies primarily focused on blockchain and cryptocurrency technologies and that also meet WisdomTree’s ESG criteria.

The ETF is designed to complements WisdomTree’s physically-backed range of single coin crypto trackers and crypto basket ETPs, providing an additional method for investors looking for exposure to the potential growth of digital assets and blockchain infrastructure.

The firm writes that WBLK represents an evolution of its digital assets expertise, having launched one of the world’s first physically-backed crypto asset ETP in 2019, built out a global digital assets team and partnered with industry leaders across the blockchain and cryptocurrency ecosystem. This expertise is combined with WisdomTree’s knowledge and experience of building multi-award winning thematic ETFs, the firm says.

Pierre Debru, Head of Quantitative Research & Multi Asset Solutions, Europe, WisdomTree, says: “Because of their high growth potential, investors often see investment in digital assets or blockchain-related assets as a thematic investment. This is a good paradigm to adopt to conceptualise investing in the space. The variety of the applications and use cases for blockchain are becoming more apparent and can be seen across entertainment, cloud storage and gaming, amongst others. While bitcoin was the first blockchain created and aimed to be a revolutionary payments system, the ecosystem has evolved far and wide outside the ‘payment sphere’. Over the years, the idea of blockchain has been extended to support smart contracts and record keeping of Non-Fungible Tokens (NFTs). The future looks bright for companies involved in the blockchain, even if we are at the early stages of proliferation.”

Blockchain is the distributed ledger technology underpinning digital assets and is, put simply, a distributed database on which information is recorded using digital signatures. Blockchain technology is a revolution in the making and could be useful wherever a transparent, immutable, and digital record of information is needed. As such, the range of potential applications for the technology is wide, diverse, and far-reaching.

The internet has changed the world over the past 25 years, similarly distributed ledger technology could be part of most aspects of our lives within a couple of decades without us even being aware of it. The Index, therefore, aims to capture this future trend by providing pure exposure to a basket of companies which support the current and future blockchain infrastructure, referred to as ‘Blockchain Enablers’ as well as companies which offer cryptocurrency and blockchain-related services, ‘Blockchain Engagers’:

·         Blockchain Enablers are companies that make up the ecosystem and, therefore, companies that develop components for the blockchain ecosystem, such as hardware and software infrastructure and cryptocurrency mining

·         Blockchain Engagers are Companies that provide blockchain and cryptocurrency services and/or applications (consulting, software, financial services) or use the blockchain to improve net income through higher sales or improved efficiency and lower costs (e.g. supply chain industry, food industry, healthcare amongst others).

A weighting limit is applied to companies categorised as Enablers, due to WisdomTree’s belief that miner rewards will decrease over time for several reasons such as the cryptocurrencies moving to ‘energy efficient models’, such as ‘Proof of Stake’ or due to protocol setups such as halving. As a result, an overweight exposure is applied to companies categorised as Engagers due to their role as key players in the Blockchain space.

Alexis Marinof, Head of Europe, WisdomTree, says: “WBLK combines our expertise in self-indexing with our in-depth knowledge of the digital asset and blockchain ecosystems, providing investors with pure exposure to this disruptive technological megatrend. The ETF is a natural evolution of our multi-award-winning thematic ETF platform and has strong synergies with our crypto asset ETP platform. We believe that blockchain is a transformative technology that has the potential to disrupt industries and enable new business models. The potential applications of the technology are endless, and we expect to see new use cases for blockchain to emerge over the coming decades.”

WBLK is the eighth ETF in WisdomTree’s USD1.1 billion thematic equity range, and the third launched in 2022 alongside WisdomTree Recycling Decarbonisation UCITS ETF (WRCY) and WisdomTree New Economy Real Estate UCITS ETF (WTRE).

WBLK is registered for sale in Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Spain, Sweden and the UK.

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