Investing in Crypto's Backbone: New ETFs Focus on Infrastructure

Amplify ETFs has launched two innovative funds that allow investors to bet on the companies driving blockchain technology, rather than the cryptocurrencies themselves. The Amplify Stablecoin Technology ETF (STBQ) and Amplify Tokenization Technology ETF (TKNQ) have recently begun trading. These funds invest in companies that generate revenue from stablecoins, tokenized assets, and the supporting systems.

Stablecoins: A Growing Trend

Stablecoins, digital currencies pegged to traditional assets, are gaining popularity beyond crypto trading. They are now being used for payments and settlements in traditional finance. The STBQ ETF invests in major companies like Visa, Mastercard, and PayPal, as well as crypto-linked ETFs from Grayscale, iShares, and Bitwise.

Tokenization: Digitizing Real-World Assets

Tokenization is another area of significant growth. It involves digitizing real-world assets and financial processes. The TKNQ ETF invests in companies such as BlackRock, JPMorgan, and Citigroup, which have been heavily investing in tokenization technology in recent years.

Regulatory Clarity Driving Innovation

Regulatory changes have paved the way for these funds. In the U.S., the GENIUS Act, and Europe's MiCA framework have provided clarity around stablecoins, giving financial institutions the confidence to develop compliant stablecoin products. Tokenization is also gaining momentum as regulators engage more with the concept.

A Broader Trend in Investing

These ETFs are part of a wider trend where investors are seeking options beyond volatile cryptocurrencies. They are focusing on companies that build compliant, revenue-generating infrastructure for blockchain-based finance. For those cautious about crypto's volatility, these ETFs offer a way to engage with the industry's growth without the intense fluctuations.