The current boom in stablecoins… Considered as ETFs

Source

Korea Economic Daily

Summary

It was reported that the share price of Circle, the U.S. issuer of stablecoins, rose up to eightfold compared to its IPO price after listing.
There is growing anticipation that as major countries seek to institutionalize stablecoins, related companies may secure regulatory stability.
It was stated that using ETFs such as BPAY and ARKF can help diversify the volatility of stocks related to stablecoins.

Global ETFs

U.S. Circle soars 8 times above IPO price

Leading products holding related companies attract attention

Diversification possible with BPAY and ARKF

Interest in stablecoins is heating up. Last month, stablecoins were the most important theme even in the ETF market. Circle Internet Financial Ltd., the U.S. issuer of the stablecoin 'USDC', saw its share price surge after being listed on the New York Stock Exchange on the 5th of last month. At last month's peak, the price had soared as much as eightfold compared to the IPO price. On Circle's first day of listing, prospectuses were submitted for leveraged ETFs and covered call ETFs that focus solely on Circle as a single stock.

In the U.S., the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a bill to incorporate stablecoins into the institutional system, passed the Senate last month, raising expectations that related companies may secure regulatory stability. Similar regulatory and legislative moves toward stablecoins are being observed not only in the U.S. but also in major countries worldwide. Accordingly, this year investors are expected to continue focusing on the crypto value chain and digital payment-related companies led by stablecoins.

Representative ETFs holding U.S. stablecoin-related companies like Circle and Coinbase include iShares Fintech Active ETF (BPAY) and ARK Fintech Innovation ETF (ARKF). BPAY invests in digital finance and fintech value chain-related companies. It is actively managed with no target index, and the fund size is approximately $7.3 million. As of the end of last month, the top holdings were Robinhood 5%, The Charles Schwab Corporation 4%, Circle 4%, Block 4%, and PayPal Holdings, Inc. 4%.

ARKF is a theme ETF centered around financial innovation companies. It actively invests at least 80% of its assets mainly in companies involved in fintech businesses. ARKF's assets total $1.1 billion.

As of the end of last month, the top holdings were Coinbase Global, Inc. 9.6%, Shopify Inc. 9.0%, Robinhood 8%, Circle 6%, ARK Bitcoin ETF 5%, and Roblox Corporation 5%. Since there is significant volatility in prices of stocks related to stablecoins, using ETFs can help reduce volatility compared to investing in single stocks, enabling more effective portfolio diversification.

Eunhye Lim, Senior Researcher, Samsung Securities

USDC