Today's guest on Let's Talk ETFs is the Co-founder and CEO of Blockforce Capital, Eric Ervin. A technologist who has been involved with blockchain technology and cryptocurrencies since shortly after they came onto the scene more than a decade ago, Eric founded ETF issuer Reality Shares in 2012 with an initial focus on dividend growth strategies. Since those early days, he has pivoted the company to expand its focus into new and exciting market opportunities - predominant among them blockchain technology.
Reality Shares currently has two different ETFs offering "pure-play" exposure to blockchain technology - the globally focused Reality Shares Nasdaq NexGen Economy ETF (BLCN) and the China-only Reality Shares Nasdaq NexGen Economy China ETF (BCNA). While the adoption of blockchain technology is still in its early days, Ervin's feeling is with such a potentially large influence on so many other fields - from digital currency to healthcare to manufacturing and shipping supply chains - "it's better to be early than late to the party".
Eric lays out the bullish case for the widespread adoption of blockchain technology in the coming decades in painstaking detail in our conversation.
Topics covered:
3:00 - What drew Eric to work with ETFs? 5:00 - How did Eric become "obsessed" with blockchain technology and cryptocurrencies? 6:30 - A brief history of cryptocurrency and blockchain technology 10:15 - Beyond cryptocurrency: From a revenue standpoint, what are the most promising uses of blockchain technology beyond digital currencies? 14:05 - Addressing privacy concerns 20:00 - Potential market size and earnings power arising from the widespread application and adoption of blockchain technology 24:10 - Building a blockchain ETF: Thinking about individual company exposures, both current and future 32:10 - On weighting holdings within a blockchain ETF: Ways to create more of a "pure-play" fund 36:40 - Why have we seen outflows from blockchain ETFs in 2019 despite the strong YTD performance? 46:00 - Comparing the two biggest ETFs in the space: Reality Shares Nasdaq NexGen Economy ETF (BLCN) vs. Amplify Transformational Data Sharing ETF (BLOK) 52:35 - Taking a deep dive into the Reality Shares Nasdaq NexGen Economy China ETF (BCNA) 58:50 - Why hasn't BCNA gathered more assets? 101:50 - When will we finally see ETFs offering direct exposure to cryptocurrencies get SEC approval?