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The best blockchain ETFs provide public market exposure to the underlying technology that supports cryptocurrencies like Bitcoin and Ethereum.
But blockchain’s potential can extend far beyond crypto, enabling technologies like digital IDs, guaranteeing copyright and royalty protection, ensuring food safety, and verifying wills and inheritances.
Best Blockchain ETFs: Background
A blockchain is a public ledger of transactions that records data.
It is a specific kind of database that stores information in “blocks” that get chained together.
Blockchainscan record transactions between two parties efficiently and in a verifiable and immutable way.
However, not all blockchains are created equally — they have varying degrees of decentralization and security.
Bitcoin is perhaps the only truly decentralized version of a blockchain.
Bitcoin is a distributed network of nodes running bitcoin’s transaction ledger. These nodes are spread around the world and are not vulnerable to a single point of failure.
The nodes that power the network agree that a transaction is accurate and that information is copied on each node.
The nodes can cross-reference each other to detect an incorrect transaction on the network, such as double-spending.
Decentralization makes Bitcoin antifragile and censorship resistant.
However, not all blockchains are decentralized like Bitcoin. Some are less decentralized, and some are private centralized versions that operate under a single roof.
Best Blockchain ETFs
#1. Global X Blockchain ETF (BKCH)
- Total Returns TTM: -53%
- Expense Ratio: 0.50%
- Annual Dividend Yield: N/A
- Assets Under management: $93 million
- Inception Date: July 12, 2021
- Issuer: Global X
- Category: Multi-Cap Equities
- Number of Holdings: 26
The Global X Blockchain ETF (BKCH) seeks to invest in companies positioned to benefit from the increased adoption of blockchain technology, including companies in digital asset mining, blockchain and digital asset transactions, blockchain applications, blockchain and digital asset hardware, and blockchain and digital asset integration.
BKCH is the newest blockchain ETF to hit the market, and we believe it’s the best option amongst the funds in this article.
Its high concentration in the best bitcoin mining stocks may enable it to outperform its peers.
They are mining blocks, securing the network, and reaping block rewards for their efforts. Or in the case of Coinbase, the company provides services that are downstream of mining, such as buying the asset on a trusted exchange.
BKCH Top Holdings:
- Coinbase (COIN) 11.99%
- Riot Blockchain (RIOT) 10.74%
- Marathon Digital (MARA) 9.39%
- Northern Data (NB2) 7.22%
- Galaxy Digital Holdings (GLXY) 6.59%
#2. Valkyrie Bitcoin Miners ETF (WGMI)
- Total Returns TTM: -39%
- Expense Ratio: 0.75%
- Annual Dividend Yield: N/A
- Assets Under management: N/A
- Inception Date: February 7, 2022
- Issuer: Valkyrie
- Category: Public Equity ETF
- Number of Holdings: 21
The Valkyrie Bitcoin Miners ETF was just approved by the SEC and began trading in February of 2022.
WGMI is an actively managed ETF that invests in public companies in the bitcoin mining industry. It is a “climate positive portfolio” and screens its holdings based on their renewable energy usage.
In fact, about 80% of WGMI holdings utilize at least 50% renewable energy for mining.
The fund does not directly invest in bitcoin, but you can expect its performance to directionally follow it.
In a press release following the launch, CEO of Valkyrie Leah Wald said, “Bitcoin miners are an alternative asset class that are rapidly coming into focus for many investors.”
Wald continued, “These companies are fully regulated the same way as any other publicly traded company, and offer investors yet another avenue to gain indirect exposure to the digital asset space.”
Hats off to Valkyrie for the ticker selection as well.
WGMI Top Holdings:
- Bitfarms (BITF) 10.99%
- Argo Blockchain (ARBK) 10.71%
- CleanSpark (CLSK) 10.31%
- HIVE Blockchain Technologies (HIVE) 9.07%
- Stronghold Digital Mining (SDIG) 5.96%
#3. Amplify Transformational Data Sharing ETF (BLOK)
- Total Returns TTM: -41%
- Expense Ratio: 0.71%
- Annual Dividend Yield: 1.09%
- Assets Under management: $842 million
- Inception Date: January 16, 2018
- Issuer: Amplify
- Category: Large Cap Blend Equities
- Number of Holdings: 48
BLOK is an actively managed exchange-traded fund that invests at least 80% of its net assets in equity securities of companies involved in developing and utilizing blockchain technologies.
BLOK invests in companies advancing “transformational data sharing technologies” or profitably deploying such technologies.
This includes various bitcoin miners, crypto exchanges, and other companies that are leveraging the technologies enabled by bitcoin.
For example, some Nvidia (NVDA) machines are used for crypto mining.
Coinbase connects buyers and sellers of dozens of different cryptocurrencies.
Silvergate Capital is a banking platform for entrepreneurs in the fintech and digital asset industry.
BLOK Top Holdings:
- Silvergate Capital (SI) 5.28%
- CME Group (CME) 4.58%
- SBI Holdings (8473:TKS) 4.43%
- Nvidia (NVDA) 4.27%
- GMO Internet (9449:TKS) 3.83%
#4. Siren Nasdaq NextGen Economy ETF (BLCN)
- Total Returns TTM: -33%
- Expense Ratio: 0.68%
- Annual Dividend Yield: 0.65%
- Assets Under Management: $172 million
- Inception Date: January 7, 2020
- Issuer: Siren
- Category: Large Cap Blend Equities
- Number of Holdings: 64
BLCN seeks long-term growth by tracking the investment returns of Siren Nasdaq’s Blockchain Economy Index.
Siren and Nasdaq partnered to create an index to measure companies’ returns that are committing material resources to develop, research, support, innovate, or utilize blockchain technology for their use or for use by others.
The second largest holding in this ETF is IBM. Granted, it’s only 2.1%, but it says something about the fund.
BLCN Top Holdings:
- Mastercard (MA) 2.25%
- American Express (AXP) 2.15%
- MicroStrategy (MSTR) 2.14%
- Visa (V) 2.11%
- Advanced Micro Devices (AMD) 2.11%
Best Blockchain ETFs: FAQs
What is the Best Blockchain ETF?
BLOK has been the best performing blockchain ETF in recent years and has the highest assets under management by more than double the next competitor. A However, the Global X Blockchain ETF (BKCH) is probably the best blockchain ETF.
Are there any Cryptocurrency ETFs?
You will not find any publicly traded ETFs that track specific cryptocurrencies, but you can invest in companies that build crypto solutions or infrastructure. For example, Marathon Digital Holding is one of the first Nasdaq-listed cryptocurrency mining companies.
What is the Best Way to Invest in Blockchain Technology?
We recommend diversifying into the highly competitive space by choosing an ETF such as BKCH, WGMI, BLOK, BLCN, KOIN, or LEGR. While the expense ratios are higher for this kind of niche exposure, you will be rewarded nonetheless by the inevitable adoption of blockchain.
Can I buy a Bitcoin ETF?
You can buy a bitcoin futures ETF today under the ticker symbols BITO or BTF. The Grayscale Bitcoin Trust (GBTC) is another way to gain public market exposure to bitcoin. This fund pools investors’ money and buys bitcoin on their behalf. GBTC serves as a placeholder until the SEC approves a bitcoin spot ETF.
Can You Buy Blockchain Stock?
Yes, there are several publicly-traded blockchain and mining stocks. Some of the best mining stocks include Core Scientific (CORE), Hut 8 Mining (HUT), Argo Blockchain (ARBK), Riot Blockchain (RIOT), and Marathon Digital (MARA).
Bottom Line: Best Blockchain ETFs
The best blockchain ETFs provide easy access to investors to invest in the broader crypto industry and blockchain technology.
However, we believe the Global X Blockchain ETF (BKCH) is the only one worth consideration. Time will tell for WGMI, but it appears to be promising.
Buying the asset that created the “blockchain industry” has less counterparty and execution risks, and will probably outperform over the long-term.
This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we selected the best blockchain ETFs. This article was updated on May 7th, 2022 to reflect changes in performance and characteristics of each fund. The KOIN and LEGR ETFs were also removed from our list on this update.