Crypto Going Mainstream Could Be Fabulous for Fintech ETF

As enthusiasts and other market participants know, cryptocurrency, led by bitcoin, is gaining mainstream prominence.

That ascent is still in its formative stages, and as it gains momentum, it brings implications for other assets, including the ARK Fintech Innovation ETF (NYSEARCA: ARKF). While the ARK exchange traded fund doesn’t provide direct ownership of bitcoin or other digital coins, it is an established force in the crypto-correlated ETF space.

That’s meaningful at a time when more investors are warming to crypto. A recent survey by U.K.-based banking, exchange, and investment app Ziglu indicates that more investors are in fact embracing crypto.

“Ziglu’s study found that 63% of crypto investors have moved money into crypto from other types of investments as people look for long-term alternatives and ways to diversify, with savings accounts and cash ISAs by far the biggest source of investments in cryptoassets,” according to the firm.

Those are meaningful trends for ARKF due to its broad reach into the crypto ecosystem via equities — a trait that makes the ETF appealing to a broad audience of crypto-aware investors who might not be ready for direct ownership. There are other sources of allure with ARKF that long-term investors could be keen on, too.

“More than a third (35%) of crypto investors say their main reason for buying digital assets is to find another long-term investment, while the same number say their main motivation is to diversify their holdings. 30% say they are attracted by the performance of cryptocurrencies,” adds Ziglu.

More investors approaching crypto as a long-term investment highlights potential benefit to ARKF because the fund features exposure to crypto exchange operators and other related crypto platforms. Speaking of exchange operators, such as ARKF component Coinbase (NASDAQ:COIN), those companies are playing a vital role in investors’ increasing willingness to embrace digital assets.

“Around a third (32%) say they look to crypto trading platforms as one of their sources for guidance on how to invest but almost as many (31%) are relying on advice from family or friends while 22% say they follow experts on social media and 12% rely on social media adverts,” notes Ziglu.

As noted above, one of the primary benefits of ARKF is that it can be responsive to crypto prices without subjecting investors to all of the volatility.

“Bitcoin prices have climbed more than 70% in the past three months, with other cryptocurrencies including Ether, Litecoin and Dogecoin also recording strong gains, despite remaining on the whole below previous record highs following recent market volatility,” concludes Ziglu.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.