The recent hype around Bitcoin has lit a fire under blockchain technology and the associated companies on the stock market. This is particularly true for stocks linked closely to the cyber currency, such as MicroStrategy. Founded by Michael Saylor in 1989, the software developer has seen a roughly fivefold increase in its share price in the last year. This in turn resulted in the Virginia company climbing into the popular Nasdaq 100 on 23 December. The reason behind the rally of the specialist in analysis software lies in Saylor’s enthusiasm for Bitcoin. He began to buy Bitcoin through his company in August 2020 and is now sitting on a mountain of around 440,000 BTC having a total value in excess of USDbn 40. That means about 2% of all bitcoins to have been mined worldwide are in the hands of MicroStrategy. Square founder Jack Dorsey has a similar weakness for crypto assets: he changed the name of his company to Block in 2021 in honour of the blockchain. In addition to its familiar POS terminals and the Cash App, which enables a broad spectrum of functions from Bitcoin investment to borrowing, Block is also actively involved in mining and even working on the development of its own mining chip.
On the subject of chips, enormous computing power is needed if computers are to be used in mining and the blockchain. This is where the big chip providers such as AMD, Intel and Nvidia come into play. The last of these has already been assisting the mining of many crypto coins with its high-performance processors for years. One of its competitors, AMD, is also an active player. The company has carved out a position for itself in the Web3 sector, the next stage in the development of the internet. Web3 applications and blockchain algorithms require high-performance computing, for which the company provides a range of processors such as the AMD EPYC CPUs. By its own account, the group has already set more than 300 world records on multiple platforms with its solutions.
It is not just household names that have nailed themselves to the mast of this pioneering technology, however: Box, which is less well known in Switzerland, has also built a lucrative business model for itself. Founded in 2005, the US company offers cloud-based content management solutions for a wide range of industries. The Japanese Digital Garage is likewise developing solutions using the blockchain. Investors do not have to search out the top stocks for themselves when building a diversified investment in this trending theme, because Swissquote created just such an index in August 2021. In addition to the companies already mentioned, the barometer also includes many other stocks that generate revenue from digital chains. The Swissquote Blockchain Index currently comprises 17 members, but this can change quickly: the index sponsor continually reviews the composition, and this active management approach ensures that the structure is always up to date.
Leonteq offers a corresponding open-end tracker on the Swissquote Blockchain Index, giving investors easy access to the opportunities afforded by the disruptive technology. Aside from an annual fee of 1.10%, the product participates fully in the performance of the diversified index. The costs are made up of an index calculation fee of 0.85% p.a. and a management fee of 0.25% p.a. Rebalancing expenses of 0.10% may also be applied. Given the active investment approach, the fee structure is very reasonable indeed. The track record also speaks for itself: the certificate has appreciated by more than 40% on a one-year view.
Management Fee: 1.10% p.a.
Index Sponsor: Swissquote Bank SA
Issuer: Leonteq Securities AG, Guernsey
Guarantor: PostFinance AG, Bern, Switzerland
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