Top 7 Best Blockchain ETFs

Blockchain technology has become synonymous with cryptocurrencies like Bitcoin and Ethereum, but its potential goes far beyond digital coins.

It has the power to revolutionize various aspects of our lives that involve record keeping, and this article will guide you through the best blockchain ETFs available.

Blockchain ETFs make it easy for investors to tap into this innovative technology by allowing them to invest in a diverse range of companies that are actively engaged with blockchain strategies.

Here they are:

What you'll learn:

➤ Best Blockchain ETFs

1️⃣ Amplify Transformational Data Sharing ETF (BLOK)

Assets Under Management (AUM): $501 million
Expense Ratio: 0.75%
Investing Strategy: Active

The Amplify Transformational Data Sharing ETF, or BLOK, stands out as a pioneer in the world of blockchain ETFs. Launched in January 2018, it was the first ETF dedicated to blockchain technology.

Thanks to this first-mover advantage, it has excelled in terms of AUM and liquidity. BLOK focuses on companies developing or utilizing blockchain technologies, including crypto exchanges and firms creating new blockchain applications.

2️⃣ Bitwise Crypto Industry Innovators ETF (BITQ)

Assets Under Management (AUM): $83 million
Expense Ratio: 0.85%
Investing Strategy: Passive

The Bitwise Crypto Industry Innovators ETF is a passive fund that tracks the Bitwise Crypto Innovators 30 Index.

This index includes 30 companies deeply involved in the cryptocurrency market, covering crypto mining, mining equipment suppliers, and financial services companies.

To be included in this benchmark index, a company must derive at least 75% of its revenues from cryptocurrency or hold at least 75% of its net holdings in digital assets.

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3️⃣ Global X Blockchain ETF (BKCH)

Assets Under Management (AUM): $81 million
Expense Ratio: 0.50%
Investing Strategy: Passive

The Global X Blockchain ETF is another passive fund that invests in companies positioned to benefit from the adoption of blockchain technology. This includes crypto mining firms, crypto exchanges, and companies actively developing new blockchain applications.

The fund tracks the Solactive Blockchain Index, which monitors companies worldwide focused on blockchain development, cryptocurrency innovation, and cryptocurrency mining hardware.

4️⃣ Siren Nasdaq NexGen Economy ETF (BLCN)

Assets Under Management (AUM): $72 million
Expense Ratio: 0.68%
Investing Strategy: Passive

The Siren Nasdaq NexGen Economy ETF, launched in January 2018, is another passive fund that tracks the Nasdaq Blockchain Economy Index.

This index consists of stocks from companies that either develop blockchain technology or use it for their businesses. BLCN offers a well-diversified portfolio of well-known stocks involved in the blockchain economy.

5️⃣ VanEck Digital Transformation ETF (DAPP)

Assets Under Management (AUM): $45 million
Expense Ratio: 0.50%
Investing Strategy: Passive

Launched in April 2021, the VanEck Digital Transformation ETF (DAPP) is another passive fund that tracks the performance of the MVIS Global Digital Assets Equity Index.

This index includes stocks from companies active in cryptocurrency and blockchain. A notable feature is its exposure to international stocks, with 34% of its holdings based outside the U.S. as of April 2023.

6️⃣ Fidelity Crypto Industry and Digital Payments ETF (FDIG)

Assets Under Management (AUM): $34 million
Expense Ratio: 0.39%
Investing Strategy: Passive

Launched in April 2022, the Fidelity Crypto Industry and Digital Payments ETF is benchmarked to the Fidelity Crypto Industry and Digital Payment Index.

This index tracks the performance of global cryptocurrency, blockchain, and digital payment companies. As of April 2023, FDIG owns 31 stocks, with 61% in financial services and 37% in the tech industry.

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7️⃣ First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT)

Assets Under Management (AUM): $19 million
Expense Ratio: 0.85%
Investing Strategy: Active

The First Trust SkyBridge Crypto Industry and Digital Economy ETF is actively managed and was launched in September 2021.

CRPT aims to invest at least 80% of its net assets in companies active in the cryptocurrency economy.

It’s worth noting that Anthony Scaramucci, former Trump administration chief of staff, is involved in this fund.

➤ What Is Blockchain Technology?

Blockchain is like the secret sauce behind cryptocurrencies, and it’s more amazing than you might think. At its core, it’s a digital ledger that keeps records, not just of cryptocurrency transactions, but pretty much any data you can imagine. What makes it stand out is the way it’s structured.

Imagine a network of computers, and each computer is a “node.” These nodes all have an identical copy of the digital ledger, which is like a super-secure journal. The beauty of this is that it’s incredibly hard to tamper with because all the nodes need to agree on any changes.

Now, let’s break down the name. “Blockchain” comes from the way the system works. Computers in the network take pieces of data, like smart contracts, Bitcoin transactions, or even logistics info for companies, and bundle them up into “blocks.”

These blocks are like entries in the ledger. As new blocks get added, copies of the whole ledger are updated on each node.

Here’s the cool part: before new data gets added to the ledger, all the nodes have to give it a thumbs-up. This makes sure that things like spending the same crypto coin twice or verifying shipments in logistics all check out. It’s a super secure way of recording and verifying information.

➤ What Are Blockchain ETFs?

Now that we know what blockchain is, let’s talk about Blockchain ETFs.

ETF stands for Exchange-Traded Fund. These are like a basket of stocks, but instead of regular stocks, they’re all about companies that use or develop blockchain technology.

While Bitcoin ETFs and crypto ETFs mainly focus on tracking cryptocurrency prices, blockchain ETFs cast a wider net. They include a variety of assets beyond just cryptocurrencies.

Blockchain technology isn’t just about Bitcoin and Ethereum; it can do so much more.

For example, Walmart in Canada uses it to automate invoice and payment management for its logistics partners. That’s just one example of how versatile blockchain can be.

These Blockchain ETFs invest in a whole bunch of different companies. They fall into several categories:

Companies that own cryptocurrency: Some companies, like MicroStrategy and Tesla, have significant holdings of cryptocurrencies on their balance sheets.

Crypto exchanges and miners: You’ve got Coinbase, a major crypto exchange, and companies like Marathon Digital that are all about mining cryptocurrencies.

Financial services firms: Firms like Galaxy Digital Holdings specialize in managing assets based on blockchain technologies.

Tech companies: Companies like NVIDIA Corp supply the hardware that powers blockchain systems.

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➤ Why Invest in Blockchain ETFs?

Blockchain is a buzzword for a reason; it’s incredibly exciting! But, here’s the thing, it’s still in its early stages. You’ve probably heard about cryptocurrencies’ wild price swings in the news, but there’s so much more to blockchain that’s not as flashy.

Big, established companies are starting to explore blockchain, but smaller, specialized firms are diving headfirst into it. Yet, we haven’t seen the “killer app” that makes blockchain an essential part of business and technology.

This is where Blockchain ETFs come in. Investing in just one or a few companies focused on blockchain or crypto can be pretty risky. By investing in a diversified blockchain ETF, you spread the risk and get exposure to a whole bunch of companies all at once.

As the blockchain world keeps evolving, choosing a blockchain ETF for your investment portfolio can be a smart move. It’s like putting your money on the whole team, rather than just one player.

So, if you believe in the potential of blockchain, ETFs are an excellent way to ride the wave of this exciting technology.

➤ Final Thoughts

In conclusion, blockchain ETFs offer a diversified and less risky way to invest in the blockchain industry.

They cover a wide range of companies involved in blockchain technology, making it easier for investors to access this exciting and evolving space.

As the blockchain sector continues to grow, these ETFs are a promising investment option to consider.

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These Are the Top 7 Blockchain ETFs