Blockchain is not the same as bitcoin and cryptotechnology is not the same as cryptocurrencies. This difference is now becoming very clear. A few days ago, the insolvency of the crypto exchange FTX made headlines and also caused the listings of financial institutions involved in cryptocurrencies such as Silvergate Capital and cryptocurrencies to drop significantly. themselves. In the case of Bitcoin, Ethereum and Ripple, year-to-date losses have now totaled over 60% each. Negative headlines from the cryptocurrency world are unsettling investors. Investors have been nervous all year. Stock markets around the world fell on rising interest rates and fears of a recession. Tech stocks were particularly hard hit. This is also evident from the evolution of the prices of Solactive Blockchain & Cryptotech Index, which has lost around 30% since the index began in early April. On the interest side, there has been an easing in recent weeks. The Solactive Blockchain & Cryptotechnologies Index is currently very volatile.
The bankruptcy of the crypto exchange is expected to shake the market and stocks in the sector for some time. Bitcoin is the first, but only one of the many applications and possibilities of the blockchain technology that underpins it. Blockchain technology alone, i.e. beyond virtual coins, has enormous potential. There are many numbers and predictions about the potential of blockchain technology. A study recently published by Custom Market Insight shows that approximately US$4.8 billion will be spent on blockchain technology in 2021. By 2030, the market could grow to US$69 billion.
“A blockchain is a database that is not centralized on one computer, but distributed across multiple computers. Your most important task is to securely document digital transactions. This distributed storage of data and transactions makes the blockchain particularly secure. Theoretically, every computer would have to be hacked into accessing or changing information, but that’s nearly impossible,” weclapp explains of the term “blockchain” on their website. Blockchain technology is by no means limited to finance. In its “Time for Trust” study, the consulting firm PwC identifies the greatest potential areas of application for blockchain. With an estimated global value creation potential of US$962 billion by 2030, the point of origin ranks first. Using blockchain, according to PwC, businesses and organizations would be able to verify the provenance of their goods and track their movement every step of the way. Fraudulent actions or counterfeits can thus be identified immediately. The financial sector follows with a potential of 433 billion US dollars. Here, blockchain could bring efficiency gains, especially for securities issuance and payment transactions. This saves time and money. PwC cites “identity verification” ($224 billion), “contract and document documentation ($73 billion) and “customer relationship management” ($54 billion) as other areas of promising applications.
Blockchain as an investment opportunity
The Solactive Blockchain & Cryptotechnologies Index does not focus on cryptocurrencies themselves, but on listed companies active in the field of blockchain technology, i.e. developers, consultants, providers of services or trading platforms. In the medium term, you could benefit to an above-average extent from the dynamic growth of this young technology. Of the Solactive Blockchain & Crypto Technology Index consolidates up to 25 blockchain stocks under one roof. A prerequisite is a free market capitalization of at least one billion US dollars. Currently, shares of financial institutions and trading platforms such as Coinbase, PayPal, Robinhood, Silvergate Capital and Visasapp developers like Alphabet, MetaPlatforms, Microsoft and Synopsis as well as hardware manufacturers such as AMD and Nvidia at the index. Index reviews occur semi-annually, as does equal weighting. All dividends are reinvested in the index. Note: Cryptocurrencies such as Bitcoin are in the index Not contain. You can participate in the evolution of the price of this index individually and without time limit by using the HVB Open End Index certificate (ISIN: DE000HB5JNF1).
|HVB Open End Index Certificate|
|Underlying||Solactive Blockchain & Crypto Technology Index|
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|repayment date||open end*|
|administration fees||1.3% per year|
|* The issuer, UniCredit Bank AG, has the right to terminate the certificate in an ordinary manner and to redeem it at the respective redemption amount.
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Blockchain Index Article – FTX Bankruptcy Not Settled! first appeared on the onemarkets blog (HypoVereinsbank – UniCredit Bank AG).