The Zacks Analyst Blog Highlights: BLCN, BLOK, LEGR, SOXX and SMH

Zacks Equity Research
·6-min read

For Immediate Release

Chicago, IL – October 26, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Reality Shares Nasdaq NexGen Economy ETF BLCN,Amplify Transformational Data Sharing ETF BLOK,First Trust Indxx Innovative Transaction & Process ETF LEGR, iShares PHLX Semiconductor ETF SOXX and VanEck Vectors Semiconductor ETF SMH.

Here are highlights from Friday’s Analyst Blog:

ETFs to Gain on Growing Viability of Cryptocurrencies

As soon as COVID-19 hit the globe, social distancing mandates and fears that notes may be carriers of the virus made the concept of digital currency popular. Be it corporations or central banks – all are mulling over the greater acceptance of cryptocurrencies.

Notably, bitcoin is up about 80% this year as cryptocurrencies are drawing considerable attention this year. Bitcoin crossed the mark of $12,000 lately and marked its highest level since July 2019 on Oct 21.

Corporations’ Greater Acceptance

On Oct 21, PayPal announced that it will allow customers to hold bitcoin and other virtual coins in its online wallet and shop using cryptocurrencies at the 26 million merchants on its network. The new service makes PayPal one of the largest U.S. companies to provide consumers access to cryptocurrencies.

This is great news for bitcoin and rival cryptocurrencies. Bitcoin jumped about 7% on Oct 21 on the PayPal news. PayPal competitor Square launched support for bitcoin back in 2018 through its Cash app. Square also bought $50 million in bitcoin this month as part of a larger investment in cryptocurrency.

However, PayPal is broadening the area by supporting bitcoin, Ethereum, Bitcoin Cash, and Litecoin. PayPal also plans to extend support to its money-sending subsidiary Venmo and international markets starting in the first half of 2021.

For now, the plan is only to support U.S. users. Notably, U.S. account holders will be able to buy, sell and hold cryptocurrencies in their PayPal wallets over the coming weeks, the company said, as quoted on Reuters. Other companies those accept bitcoins include Microsoft, AT&T, Dish Network, Burger King, Domino’s Pizza, Goldman Sachs, Intuit Inc, American online retailer Overstock, Shopify, Virgin Galactic, Zynga and Etsy,among others.

Central Bank Digital Currency (CBDC) Concept Spreading

Several central banks are considering the rollout of CBDCs lately. China has been taking serious moves toward no-touch payments. In efforts to match with China, seven major central banks last week set the key principles for issuing CBDCs, per Reuters. China's recent experimental $1.5 million (1.16 million pounds) giveaway of digital yuan to Shenzhen citizens received kudos from currency analysts.

Sweden’s Central Bank, Riksbank is also conducting a pilot project with Accenture to prepare e-krona. The European Central Bank (ECB) is mulling over the rollout of a "digital euro" for the 19-nation currency club. The ECB launched a public consultation on a potential digital euro on Oct 12.  In its 2020-2024 strategic plan, the Bank of Spain also said that it will focus on design proposals for a central bank digital currency.

On Oct 19, Jerome Powell, Chairman of the Board of Governors of the U.S. Federal Reserve, said that the Fed is committed to considering a CBDC but made no final call on it.  The Fed wants “to get it right than be first,” said Jerome Powell. “One set of experiments is being carried out at the board of governors here in Washington, D.C.,” Powell said.

How to Invest in the Recent Rise of Cryptocurrencies?

Investors can choose to invest in options like blockchain ETFs. Per a source, “the blockchain in Bitcoin literally acts [as] a ledger; it keeps track of the balances for all users and updates them as money changes hands.” “Invented to host bitcoin, today many other cryptocurrencies are also based on blockchain technology.”

So, since investors cannot lay their hands on a digital currency ETF now, they can definitely familiarize with the concept through blockchain ETFs like Reality Shares Nasdaq NexGen Economy ETFAmplify Transformational Data Sharing ETF and First Trust Indxx Innovative Transaction & Process ETF.

Also, ETFs offering exposure to the blockchain ecosystem via semiconductor companies that make chips for bitcoin mining (or could make for some potential CBDCs) can be played. The most-popular funds include iShares PHLX Semiconductor ETF and VanEck Vectors Semiconductor ETF.

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iShares PHLX Semiconductor ETF (SOXX): ETF Research Reports
 
VanEck Vectors Semiconductor ETF (SMH): ETF Research Reports
 
Reality Shares Nasdaq NexGen Economy ETF (BLCN): ETF Research Reports
 
Amplify Transformational Data Sharing ETF (BLOK): ETF Research Reports
 
First Trust Indxx Innovative Transaction Process ETF (LEGR): ETF Research Reports
 
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