Best Blockchain ETFs: Investing in the Future
Many investors likely associate blockchain with popular cryptocurrencies like Bitcoin and Ethereum, but its applications extend far beyond. This technology is driving innovation across various industries and services, offering new investment opportunities.
What is Blockchain Technology?
At its core, blockchain is a series of information “blocks” recorded on independent computers within a shared network. Each data block is permanently recorded on an open ledger, accessible to all participants, and this feature makes blockchain technology vital in sectors requiring top-tier security, such as banking.
As a retail investor, there are several avenues to participate in this emerging technology.
To understand it, consider that blockchain reduces the risk of fraud and data manipulation by democratizing information access on an open, transparent ledger. This makes it incredibly difficult for users to alter information, linking verified data and streamlining processes that may have been inefficient, like manual transaction recording.
An example of blockchain in action is Walmart’s use of the technology to enhance food safety by tracing products back to their origin. This can help quickly identify and isolate the source of an E. coli or salmonella outbreak, preventing contaminated products from spreading.
Major corporations such as Microsoft, PayPal, Starbucks, Salesforce, and IBM are using blockchain for digital security, automating processes, and upgrading infrastructure.
How to Invest in Blockchain
Beyond directly trading cryptocurrencies or investing in individual stocks, investors can gain exposure to blockchain technology via exchange-traded funds (ETFs). A blockchain ETF holds a collection of publicly traded companies that are involved with blockchain technology. It is important to note that, although some funds are tied to futures of major cryptos like Bitcoin and Ethereum, blockchain ETFs don’t directly hold cryptocurrency assets.
These funds are designed to invest in global companies, including many established technology names.
Top Blockchain ETFs
Since there are no pure-play blockchain companies, the holdings in these funds tend to overlap with other broad-based ETFs. Here are some of the top blockchain ETFs by assets under management (as of February 6, 2025):
- Amplify Transformational Data Sharing ETF (BLOK)
- Expense ratio: 0.76%
- Assets under management: $932 million
- 3-month performance: 29.2%
- Siren Nasdaq NexGen Economy ETF (BLCN)
- Expense ratio: 0.68%
- Assets under management: $60 million
- 3-month performance: 6.3%
- First Trust Indxx Innovative Transaction & Process ETF (LEGR)
- Expense ratio: 0.65%
- Assets under management: $90 million
- 3-month performance: 6.0%
- Global X Blockchain ETF (BKCH)
- Expense ratio: 0.50%
- Assets under management: $191 million
- 3-month performance: 18.1%
- VanEck Digital Transformation ETF (DAPP)
- Expense ratio: 0.51%
- Assets under management: $210 million
- 3-month performance: 22.5%
- Source: etfdb.com
Amplify Transformational Data Sharing ETF (BLOK)
Amplify Transformational is the leading blockchain ETF. This actively managed fund chooses companies that develop and apply blockchain technologies. It seeks to invest at least 80% of its net assets in companies involved in “transformational data sharing technologies”.
- Top holdings: Robinhood Markets (HOOD), Metaplanet (MTPLF) and Galaxy Digital Holdings (GLXY)
- Expense ratio: 0.76 percent
- Assets under management: $932 million
Siren Nasdaq NexGen Economy ETF (BLCN)
Siren NextGen holds global companies that commit resources to developing, researching, and supporting blockchain technology for others to use. Top holdings include:
- Top holdings: Accenture (ACN), Robinhood and Qualcomm (QCOM)
- Expense ratio: 0.68 percent
- Assets under management: $60 million
First Trust Indxx Innovative Transaction & Process ETF (LEGR)
First Trust Indxx offers a global portfolio of companies that benefit from blockchain technology or the potential of efficiency gains it offers.
- Top holdings: JD.com (JD), Salesforce (CRM) and Industrial and Commercial Bank of China Ltd (IDCBY)
- Expense ratio: 0.65 percent
- Assets under management: $90 million
Global X Blockchain ETF (BKCH)
Global X invests in global companies participating in blockchain activities like digital asset mining and integration.
- Top holdings: Coinbase Global (COIN), MARA Holdings (MARA) and Core Scientific (CORZ)
- Expense ratio: 0.50 percent
- Assets under management: $191 million
VanEck Digital Transformation ETF (DAPP)
VanEck Digital invests 80% of its total assets in securities of digital transformation companies and aims to track the Global Digital Assets Equity Index.
- Top holdings: Coinbase Global, Strategy (MSTR) and Block (XYZ)
- Expense ratio: 0.51 percent
- Assets under management: $210 million
Cryptocurrency vs. Blockchain ETFs
For those interested in digital currencies, Bitcoin and Ethereum ETFs are available that allow you to invest through a traditional exchange. You also can own cryptos directly or through futures contracts.
If you want to trade digital currencies such as Bitcoin, you can access specialized crypto exchanges such as Coinbase or Binance. Alternatively, some of the best traditional brokers to buy and sell crypto include Charles Schwab and Interactive Brokers, which offer Bitcoin futures contracts.
Risks Associated with Emerging Technologies
Similar to other thematic investments such as electric vehicles or artificial intelligence, blockchain ETFs also come with added volatility risks. These risks can be market-related, such as price fluctuations or sudden changes in investor sentiment, or they can be macro risks, like regulatory changes.
Consider Bitcoin, which uses blockchain technology to store every transaction. The digital currency has been around since 2009, but it faces skepticism from some authorities and investors. This uncertainty can lead to greater volatility.
Assessing the value of Bitcoin and other cryptocurrencies like Ethereum, XRP, and Cardano remains a challenge for both sophisticated and retail investors. Most traders seem unsure of their current or future value.
Nevertheless, the trend in cryptocurrency trading will likely continue trending upward.
Bankrate’s Logan Jacoby contributed to the update of this article.
