VanEck: Blockchain’s real world impact grows as hype recedes

15 april 2024

• As the buzz around blockchain technology has subsided, so the technology is beginning to show signs of fulfilling its potential across a range of areas
• From financial services to supply chains, blockchain is beginning to enable disruptive product innovation and greater efficiency
• The VanEck Crypto and Blockchain Innovators UCITS ETF offers access to the technology ecosystem’s crypto miners, exchanges and other businesses

It’s said in economics that “things take longer to happen than you think they will, and then they happen faster than you think they could.”^[1] Much the same may happen with the blockchain – the digital ledger technology that not only underlies cryptocurrencies but also has the potential for enabling innovation across a range of sectors.

Blockchain became widely noticed in 2009 when the Bitcoin cryptocurrency was released. It was touched by some of the hype around cryptocurrencies. In 2017, for instance, the New York-based beverage maker Long Island Iced Tea changed its name to Long Blockchain Corp, announcing it would invest in cryptocurrencies.

The result? Reportedly, the stock price briefly climbed by 500%.^[2] Since then, though, the technology has gradually been recognized for its numerous potential applications. In short, the blockchain’s main advantages are: decentralization, immutability, transparency and security.

The hype has subsided and blockchain technology is quietly being adopted across the economy. Most publicly, Bitcoin is gaining respectability after the US Securities Exchange Commission, the financial regulator, approved the first spot Bitcoin ETFs in early 2024. Yet, less noticed, the technology is being applied in financial services, the public sector, insurance and corporate supply chains. The potential for innovation is considerable.

Below is an illustration depicting where McKinsey & Company sees blockchain having the greatest strategic business value.

After the hype has subsided, blockchain is quietly growing. The blockchain technology market was valued in 2022 at $11.1 bn and is projected to grow from $17.6 bn in 2023 to around $470 bn in 2030, according to a study conducted by Fortune Business Insights3. That equates to an impressive compound annual growth rate (CAGR) exceeding 50% over the forecast period. 

CLICK HERE FOR WHITEPAPER

^{[1] Quote attributed to Rudi Dornbusch, the distinguished German economist.
[2] ‘Fake it till you make it’ - but know when to stop. Financial Times. June 22, 2018.}

^{Important Disclosures}

^{For Dutch residents only.}

^{This is a marketing communication. Please refer to the prospectus of the UCITS and to the KID before making any final investment decisions.}

^{This information originates from VanEck (Europe) GmbH, which has been appointed as distributor of VanEck products in Europe by the Management Company VanEck Asset Management B.V., incorporated under Dutch law and registered with the Dutch Authority for the Financial Markets (AFM). VanEck (Europe) GmbH with registered address at Kreuznacher Str. 30, 60486 Frankfurt, Germany, is a financial services provider regulated by the Federal Financial Supervisory Authority in Germany (BaFin).}

^{The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. VanEck (Europe) GmbH, VanEck Switzerland AG, VanEck Securities UK Limited and their associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Brokerage or transaction fees may apply.}

^{VanEck Asset Management B.V., the management company of VanEck Crypto and Blockchain Innovators UCITS ETF (the "ETF"), a sub-fund of VanEck UCITS ETFs plc, is a UCITS management company incorporated under Dutch law registered with the Dutch Authority for the Financial Markets (AFM). The ETF is registered with the Central Bank of Ireland, passively managed and tracks an equity index. Investing in the ETF should be interpreted as acquiring shares of the ETF and not the underlying assets.}

^{Investors must read the sales prospectus and key investor information before investing in a fund. These are available in English and the KIIDs/KIDs in certain other languages as applicable and can be obtained free of charge at www.vaneck.com, from the Management Company or from the following local information agents:}

^{UK - Facilities Agent: Computershare Investor Services PLC}

^{Austria - Facility Agent: Erste Bank der oesterreichischen Sparkassen AG}

^{Germany - Facility Agent: VanEck (Europe) GmbH}

^{Spain - Facility Agent: VanEck (Europe) GmbH}

^{Sweden - Paying Agent: Skandinaviska Enskilda Banken AB (publ)}

^{France - Facility Agent: VanEck (Europe) GmbH}

^{Portugal - Paying Agent: BEST – Banco Eletrónico de Serviço Total, S.A.}

^{Luxembourg - Facility Agent: VanEck (Europe) GmbH}

^{MVIS® Global Digital Assets Equity Index is the exclusive property of MarketVector Indexes GmbH (a wholly owned subsidiary of Van Eck Associates Corporation), which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards MarketVector Indexes GmbH (“MarketVector”), Solactive AG has no obligation to point out errors in the Index to third parties. The VanEck Crypto and Blockchain Innovators UCITS ETF (the “ETF”) is not sponsored, endorsed, sold or promoted by MarketVector and MarketVector makes no representation regarding the advisability of investing in the ETF.}

^{Effective December 16, 2022, MarketVector Indexes GmbH implemented a change to the MVIS® Global Digital Assets Equity Index construction rules. The index decreased its constituent count from 25 stocks to 20 stocks.}

^{It is not possible to invest directly in an index.}

^{All performance information is based on historical data and does not predict future returns. Investing is subject to risk, including the possible loss of principal.}

^{No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.}

^{© VanEck}