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Another Blockchain ETF Arrives, This Time With A Focus On Artificial Intelligence

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Another Blockchain ETF Arrives, This Time With A Focus On Artificial Intelligence

Innovation Shares, which positions itself as an issuer of thematic and unique exchange-traded funds, rolled out Tuesday a blockchain ETF based on artificial intelligence. The Innovation Shares NextGen Protocol ETF trades on the New York Stock Exchange under the ticker "KOIN."

KOIN is the first ETF "to use artificial intelligence to identify and invest in blockchain innovators and adopters," the issuer said. KOIN is the fourth blockchain ETF to come to market, all this month.

“The index underlying KOIN was constructed utilizing a natural language processing algorithm that screens for global stocks that are believed to have a current or future economic interest in blockchain technology,” according to a statement from Miami-based Innovation Shares and Exchange Traded Concepts (ETC), a provider of white label ETF services.

Index Requirements

KOIN's underlying index was designed by Innovation Labs Ltd. and holds publicly traded companies that use or are involved in blockchain technologies.

Companies in the index must have minimum market values of $100 million and “a minimum average daily traded value for the last 6 months greater than or equal to $1 million,” according to a prospectus.

The index uses a natural language processing (NLP) algorithm that “identifies a relationship between certain keywords that are representative of targeted investment trends and themes, as well as investment securities whose short- and long-term values are affected by such trends and themes.”

KOIN is expected to charge 0.65 percent per year, or $65 on a $10,000 investment.

Competition

KOIN faces plenty of competition in the blockchain ETF arena. The Amplify Transformational Data Sharing ETF (NYSE: BLOK) debuted Jan. 17 and already has nearly $175 million in assets under management. That ETF is actively managed.

The Reality Shares Nasdaq NexGen Economy ETF (NASDAQ: BLCN) also debuted Jan. 17 and is off to a solid start. BLCN, which is passively managed, had $87.3 million in assets as of Jan. 26.

The First Trust Indxx Innovative Transaction & Process ETF (NASDAQ: LEGR), which tracks the Indxx Blockchain Index, debuted last week.

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