Take a closer look at DAPP for Fintech Rebound Opportunities
Among the disruptive growth stocks that are brutally rejected this year are fintech names. Whether it’s bitcoin miners, buy now, pay later companies or other companies in the fintech ecosystem, the point is that the group is at a disadvantage.
Add to that the fact that several fintech companies are making cryptocurrencies at a time when bitcoin prices are falling, and it is not surprising that fintech stocks are struggling with strong headwinds. Although it is not immune to the mentioned problems, it is VanEck Digital Transformation ETF (DAPP) is an example of an exchange-traded fund with deep fintech bands that provide long-term promises.
“Despite the fact that fintech is an industry that finds it difficult in the wake of a comprehensive market downturn, the outlook remains positive in the wake of the Covid-19 pandemic, “reports Demytro Spilka for Fintech Magazine. “While access to finance may be more of a challenge in a bearish market, the post-pandemic landscape is likely to create new opportunities for fintech firms.”
One of the most important short-term headwinds for DAPP is the financial condition of some bitcoin miners – an important constituency in this ETF. Recently, some miners are selling positions in the largest digital currency to strengthen their cash positions. In some cases, it is a necessary evil because the miners need the capital, but by flooding exchanges with bitcoin, they contribute to the sales pressure on the very asset they extract.
While it can be challenging to see the forest through the trees in turbulent times like these, there is still a compelling long-term argument for broader fintech names, such as Block (NYSE: SQ). The company formerly known as Square is actually cryptocurrency, but there is more to this name, which makes up almost 9% of DAPP’s portfolio.
“The acceleration of digital transformation caused by Covid-19 has been particularly lucrative for the fintech world. seemed impossible just three years ago, according to fintech. Fintech Magazine.
Among DAPP holdings, Block is the very symbol of a company that disrupts the traditional financial services area. It is possible that Coinbase (NASDAQ: COIN) – DAPP’s largest component – over time will also become a more important part of that conversation.
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The opinions and predictions expressed here are solely those of Tom Lydon, and may not come true. Information on this site should not be used or interpreted as an offer to sell, an invitation to buy or a recommendation for any product.
