Select Page

In just over a decade, cryptocurrency was introduced and almost totally transformed. Bitcoin was highly controversial and often misunderstood. The original cryptocurrency sparked many followers, but none of them reached the infamy that bitcoin developed. Recently new platforms, like blockchain, have emerged and have caused some confusion. Here are some differences between blockchain and bitcoin and the respective EFTs they represent.


History and Background


Bitcoin was developed and made public in 2009. The origins of bitcoin have still not been fully disclosed, but much of the controversy has been overlooked. Bitcoin was created to assist in online money transfers and international currency conversions. The bitcoin cryptocurrency is not backed by any stable entity such as gold, silver, or other specific currency backers.


In contrast, blockchain technologies are not in of themselves a cryptocurrency. Instead, they are data collection and reporting enterprises behind cryptocurrency transactions. Blockchain tools were created not long after bitcoin was introduced but were not really part of public knowledge until about 2018. Now blockchain EFTs are publicly traded along with bitcoin EFTs on many readily available platforms.


Electronically Traded Funds


Electronically traded funds, commonly known as EFTs, is a collection of activity held within one component. Similar to a mutual fund, EFTs hold assets in a host of different stocks, bonds, and other investment vehicles. Unlike mutual funds, they attempt to keep their net asset value stable by remaining consistently active in multiple markets at the same time. In essence, funds can be sold in one market and simultaneously sold in another market within seconds. EFTs are a popular investment option for independent investors but are not specifically designed for stable investment portfolios such as pension funds or retirement plan accounts.


Trading Blockchain and Bitcoin EFTs


Options to trade in bitcoin EFTs and blockchain EFTs present different trading exposure to investors. Bitcoin trading is dependent on market volatility, just like any other stock transaction. Cryptocurrency is more volatile than some other investment options because they are highly traded around the clock.


In contrast, blockchain EFTs are not trading in cryptocurrencies like bitcoin or altcoin EFTs. Blockchain EFTs represent the transactions from actual bitcoin trades. The “block” part of blockchain EFTs refers to each trade that makes up the trade history. Investors are trading based on the most recent activity from cryptocurrency trades and how they believe the market will be impacted by those trades.