![](https://blog.amplifyetfs.com/hs-fs/hubfs/AmplifyETFs%20August2023/images/Amplify%20Etf.png?width=7500&height=1146&name=Amplify%20Etf.png)
BLOK-Chain Monthly July 2024
Positioned At The Core For Transformational Change
BLOK closed the quarter with a 7.83% (NAV return) rebound in the month of June and year-to-date performance of 18.66% (see standardized performance). The portfolio benefited from a massive two part $4.725 billion transformative 12-year deal with Coreweave that repriced the value of the entire Bitcoin Mining sector. This deal was highlighted in last month’s report, but Core Scientific (Core) expanded the deal late in June with an additional $1.225 billion add on deal. Other companies in the sector with the proper infrastructure to pursue HPC/AI (High Performance Computing and Artificial Intelligence) also now have plans to expand in this direction, but this sweet deal may be the strongest and is probably unique to Core. Given the excitement of the returns coming from the MAG7, Bitcoin and AI we are pleased to report that our focus on transformational companies in Blockchain and Tokenization technology delivered such strong momentum in this first half of 2024. While in this first half we are benefiting from the momentum of Core, we do not think this is a singular exponential situation. Again, investors need to think through the implications, consider the internet when it was in its nascent stage and how it completely changed industries and how people engage as consumers.
Transactions and Repositioning:
Pursuant to risk controls we scaled back our exposure to Core into the rally and by now have realized almost all of our capital from the original investment and still sit on an allocation in the portfolio of about 5%. In the Quarter we also added to HIVE Technologies and added a new holding that we mentioned in our last report, Bitdeer (BTDR). Our due diligence in the miners category also led us to increase 50 Bps to both Nvidia (NVDA) and Qualcomm (QCOM).
A new position we added to the portfolio was Dell Technologies. Dell is a truly transformative company and a firm which we have tracked since its founding in 1984. As such, we have been monitoring the activity in Bitcoin since 2014. Moreover, while its servers are not used directly in Bitcoin mining they are used for AI by one particular miner which we follow. Putting together the pieces of the ecosystem as it is in its early stage of formation requires a robust due diligence process and many relationships. We may not be the loudest portfolio management team, but that does not mean that we don’t have the boots and ears on the ground. There are rumors, encouraged by a few posts by Michael Dell that the company is looking closely at Bitcoin as an important technology and or possibly as a holder of Bitcoin in its Treasury. Dell is clearly well capitalized and looking to enhance shareholder value in the form of higher dividends, technology leadership and the repositioning of its platform. To this point, it must re-ignite revenue growth which is expected to be low single digits in the near future. For this reason, we give Michael Dell the benefit of the doubt that he has signaled that he wants to leave a legacy as playing a role in the Blockchain evolution. Early company comments about Blockchain1 suggest that Mr. Dell has been thinking about the synergies between Blockchain and AI. We did not buy DELL simply because of a hope that Michael Dell is now an outspoken Bitcoin advocate, but it cannot be lost on the fact that one of the most important technologists of our time is now openly looking at the digital asset space as part of his strategy to transform the company he founded. See interview with CNBC for further insights directly from Michael Dell.2 In addition, here are two recent posts by Mr. Dell in which two of the posts are polls that suggest Blockchain is as important a trend or greater than AI. From the Desk of @MichaelDell:
1www.delltechnologies.com/content/dam/delltechnologies/assets/collaterals/pdf/Connected_Finance_Our_Digital_Solutions_Blockchain.pdf
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. For performance data current to the most recent month-end please visit BLOKETF.com.
Click HERE for BLOK’s top 10 holdings.
Click HERE for BLOK’s prospectus.
The Fund is subject to management risk because it is actively managed. Narrowly focused investments typically exhibit higher volatility. A portfolio concentrated in a single industry, such as companies actively engaged in blockchain technology, makes it vulnerable to factors affecting the companies. The Fund may face more risks than if it were diversified broadly over numerous industries or sectors. Blockchain technology may never develop optimized transactional processes that lead to realized economic returns for any company in which the Fund invests.
The Fund invests at least 80% of the Fund’s net assets in equity securities of companies actively involved in the development and utilization of blockchain technologies. Such investments may be subject to the following risks: the technology is new and many of its uses may be untested; theft, loss or destruction; competing platforms and technologies; cybersecurity incidents; developmental risk; lack of liquid markets; possible manipulation of blockchain-based assets; lack of regulation; third party product defects or vulnerabilities; reliance on the Internet; and line of business risk. The investable universe may include companies that partner with or invest in other companies that are engaged in transformational data sharing or companies that participate in blockchain industry consortiums. The Fund will invest in the securities of foreign companies. Securities issued by foreign companies present risks beyond those of securities of U.S. issuers.
The Fund may have exposure to cryptocurrencies, such as bitcoin, indirectly through investment funds. The Fund does not invest directly in bitcoin. Holding a privately offered investment vehicle in its portfolio may cause the Fund to trade at a premium or discount to NAV. Many significant aspects of the U.S. federal income tax treatment of investments in cryptocurrencies are uncertain and such investments, even indirectly, may produce non-qualifying income for purposes of the favorable U.S. federal income tax treatment generally accorded to regulated investment companies.
Amplify Investments LLC is the Investment Adviser to the Fund, and Toroso Investments, LLC serves as the Investment Sub-Adviser.
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in Amplify Funds statutory and summary prospectus, which may be obtained by calling 855-267-3837 or by visiting AmplifyETFs.com. Read the prospectus carefully before investing.
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
Amplify ETFs are distributed by Foreside Fund Services, LLC.