Horizon Kinetics Launches Blockchain Development ETF

Horizon Kinetics LLC announced the launch of its second exchange traded fund, the Blockchain Development ETF (NYSE Arca: BCDF). The actively managed fund began trading on the New York Stock Exchange on Tuesday.

BCDF seeks to invest in the equity of companies that stand to benefit, either directly or indirectly, from the issuance, facilitation, custody, trading, and administration of digital assets, including cryptocurrencies.

Murray Stahl, founder, CEO, and CIO of Horizon Kinetics, said in a news release that the firm has “been closely following the emergence of blockchain technology for many years,” and that “the applications of blockchain technology have the potential to be widespread and substantive.”

“The movement toward tokenization is likely to deeply impact operations and security in a variety of ways,” Stahl said. “Blockchain development companies facilitate the issuance, transfer, and custody of such digital assets by and between other companies.”

Blockchain development companies may include financial or other exchanges, custodial banks, asset managers, blockchain-related software companies, payment processors, and mining companies, among others.

“Blockchain provides opportunities for both new and established companies to create solutions that advance the current capabilities of what we know,” said Brandon Colavita, co-portfolio manager. “The technology is not conditional upon the success of any incumbent token and our investments will be allocated in a way that is not dependent upon a singular cryptocurrency or protocol.”

Colavita added: “We believe blockchain is here to stay, even if its utilization is still widely misunderstood by industry participants. Our active approach allows us to focus on quality companies with applications that we feel provide the greatest value for our clients over time.”

In January 2021, Horizon Kinetics LLC announced the launch of its first ETF, the Inflation Beneficiaries ETF (INFL B), an actively managed ETF that targets unique, scalable businesses that have the potential to thrive in an inflationary environment.

“Horizon Kinetics crashed the ETF party in early 2021 with a very successful inflation-focused equity ETF showcasing the firm’s active management capabilities,” said Todd Rosenbluth, head of research at VettaFi. “It’s great to see the firm expand and bring another product to market.”

Though representing an emerging part of the market that’s not been typical of Horizon Kinetics’ investments, BCDF will be managed using the same long-term, value-oriented, and research-driven philosophy that has guided the management of the firm’s other products.

“Our value-driven, fundamental analysis will drive our individual security selection for the fund,” Colavita said. “Furthermore, we believe that we can identify a variety of companies with solid fundamentals and that are trading at attractive valuations relative to their intrinsic value.”

Published on August 8, 2022

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