Reality Shares CEO Talks Blockchain ETF And The Technology's 'Massive Innovation'

February 08, 2018: 11:58 AM ET

Reality Shares co-founder and CEO Eric Ervin discussed the blockchain-focused Reality Shares Nasdaq NextGen Economy ETF (NASDAQ: BLCN) and the direction of blockchain technology during Wednesday’s PreMarket Prep.

In January, Reality Shares opened the Nasdaq NextGen Economy ETF, which invests in blockchain-related companies.

Reality uses a “Blockchain Score” system to evaluate companies that are utilizing the technology, rebalancing the portfolio every six months, Ervin said.

The SEC would not allow Reality to include “blockchain” in the ETF name due to the volatility that blockchain-related speculation has caused in recent months, Ervin said.

To quell concerns that the ETF was a speculative scam, Reality built a board of advisors with industry experts and examines the code that each company is using to ensure they are using the technology in a productive manner, he said.

Ervin stressed that the ETF is not investing in cryptocurrency, but the underlying technology that makes cryptocurrency transactions possible: “Blockchain is not bitcoin.”

Blockchain technology has cutting-edge applications outside of the cryptocurrency market.

Walmart Inc (NYSE: WMT) has teamed with IBM (NYSE: IBM) and others to launch a blockchain food safety alliance in order to enhance traceability and transparency across the food supply chain.

This could have a major impact on companies with tight margins like Walmart, said Ervin.

Blockchain technology is a "massive innovation," Ervin said, adding that bitcoin is the start, but the capabilities of the technology are far-reaching.

With Overstock.com, Inc. (NASDAQ: OSTK), Ervin predicts that the company’s blockchain-based exchange will overtake the business.

“[This segment] is gonna be bigger than the Overstock business entirely. Now they're thinking about selling Overstock," Ervin said on PreMarket Prep.

PreMarket Prep is a daily trading ideas show hosted by former floor trader Joel Elconin and prop trader Dennis Dick. You can listen to the show live and participate in our chatroom every day from 8-9 a.m. ET here. The show is also available on YouTube Live. The podcast is available on iTunes, Soundcloud, and Stitcher.

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