How are ETFs being Dominated with the Use of AI, Blockchain and Robotics?
Exchange-traded Funds (ETFs) have gained immense popularity over the past several years in the Investment Management (IM) industry due to lower average maintenance cost, tax efficiency, and diversified investment options.
Similarly, in the crypto space, the ETFs are rising in stature rapidly in comparison to high fee hedge-funds as they provide a more stable and safer means of investment.
A crypto ETF, generally, tracks one or more digital tokens like traditional ETFs that are used in the IM sector for tracking of an index or a group of assets. Investors using ETFs in the crypto market can trade and track one or more digital tokens on different exchanges.
However, crypto ETFs are not legally listed for trade purpose in many developed countries like the US due to the SEC imposed restrictions. Still, ETFs are a hot buzz in the crypto world, and a lot of investors or companies are using advanced technologies like AI, Blockchain, and Robotics for investment and management of ETFs.
Here are some of the hugely popular modern technologies that are dominating the ETF space
Here are some of the hugely popular modern technologies that are dominating the ETF space:
Blockchain technology is the underlying driving force behind the investment space and is also closely related to the creation of digital tokens. Blockchain simply can be defined as a public distributed ledger that record economic transactions in the crypto investment space. Each transaction in blockchain is verified by the other nodes available in the network, who have a copy of the distributed ledger.
Crypto currency ETF, for example, tracks the bitcoin or other crypto performance either through future contract or by holding the underlying crypto-assets. A variety of blockchain-based ETFs for investment exists in the crypto world.
For instance, Reality Shares Nasdaq NextGen Economy (BLCN) and Amplify Transformational Data Sharing (BLOK) are the two popular ETFs that allow the investors to invest in companies that are working with blockchain technology.
Thus, blockchain ETFs are one of the safest options for the investors to invest as bitcoin ETFs are slowly shutting down due to liquidity and valuation issues.
Artificial Intelligence (AI)
It can be easily said that AI is the future of investment banking and can transform the entire crypto-based trading at an astonishing speed. AI is a big buzzword and a booming technology that is emerging in the crypto world for the past couple of years.
In the case of the ETF industry, AI is mostly helping the investment fund managers in investment related decision-making by bringing useful data received from the market signals and crypto news articles.
Artificial Intelligence (AI)
AI, in simple computer language, brings intelligence into electronic systems. Thus, the AI-powered investment systems are capable to perceive the data environments, learn, and take necessary trading-related actions based on the insights.
The other notable AI capabilities include consuming, learning, and accumulating the large volume of investment data spread across different trade platforms for continuous adjustment to the investment portfolio for risk minimization and offering personalized trading recommendations to users.
DCI Ecosystem is one such upcoming investment ecosystem that has integrated AI in most of its investment-related functions. DCI ecosystem, further, provides robotic algorithms AI to assist investors to build ETFs to invest in multiple digitalized assets domains such as real.
DCI leverages the AI capabilities in order to assist the investors with their portfolio optimization, stock picking, and giving in-depth insights for portfolio creation after analyzing the past financial data and trading history.
Robotics and AI go hand-to-hand in terms of transforming the traditional investment management industry. The rising popularity of AI and robotics can also be seen from the investments made by the investors in the recent past.
For instance, the Global X Robotics and Artificial Intelligence Thematic ETF (BOTZ) had received more than $650 million from the investors in January 2018.
Investors across the crypto world are genuinely interested in getting a closer look of AI and robotics companies as they have a massive scope in terms of scalability and profitability.
Originally publish on: DCI Ecosystem Blog