Best Blockchain ETFs to Buy in 2021

Investing
Updated: 21st Oct 2021
Written by Sean Graytok
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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, and enable technologies like digital IDs, guaranteeing copyright and royalty protection, ensuring food safety, and verifying wills and inheritances.

What is Blockchain?

Blockchain is a public ledger technology for transactional applications that establish trust, accountability, and transparency.

It is a specific kind of database that stores information in “blocks” that get chained together.

Blockchain technology can record transactions between two parties efficiently and in a verifiable and immutable way.

Bitcoin employs a “decentralized” version of blockchain that puts the network users in charge instead of a central authority.

This means that Bitcoin is powered by a distributed network of nodes spread around the world, and 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 to on each node.

The nodes can cross-reference each other to detect an incorrect transaction on the network, such as double-spending, and pinpoint the exact node with the false data.

Decentralization makes Bitcoin antifragile and censorship resistant. 

However, not all blockchains are decentralized like Bitcoin. Some are less decentralized, like Ethereum, and some are private, centralized versions that operate under a single roof. 

Now that we have a little background on blockchain technology, let’s see the best blockchain ETF to invest in. 

>> More: Best Cryptocurrency Exchanges

Best Blockchain ETFs to Invest In

#1. Amplify Transformational Data Sharing ETF (BLOK)

  • Total Returns TTM: +100%
  • Expense Ratio: 0.70%
  • Annual Dividend Yield: 1.27%
  • Assets Under management: $1.3 billion
  • Inception Date: January 16, 2018
  • Issuer: Amplify
  • Category: Large Cap Blend Equities
  • Number of Holdings: 47

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.

Additionally, the ETF has exposure to firms who have partnered with or invested in blockchain technology.

BLOK’s top five holdings include Marathon Digital (MARA), Hut 8 Mining (HUT), MicroStrategy (MSTR), Coinbase (COIN) and PayPal (PYPL).

#2. Siren Nasdaq NextGen Economy ETF (BLCN)

  • Total Returns TTM: +36%
  • Expense Ratio: 0.68%
  • Annual Dividend Yield: 0.65%
  • Assets Under Management: $289M
  • 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.

BLCN’s top five holdings are Marathon Digital, MicroStrategy, Overstock.com, Silvergate Capital, and IBM.

#3. Capital Link NextGen Protocol ETF (KOIN)

  • Total Returns TTM: +29%
  • Expense Ratio: 0.95%
  • Annual Dividend Yield: 0.34%
  • Assets Under management: $31M
  • Inception Date: January 30, 2018
  • Issuer: Exchange Traded Concepts ETF
  • Category: Technology Equities
  • Number of Holdings: 45

KOIN tracks an index that uses artificial intelligence to select global stocks with a current or future economic interest in blockchain technology.

The index’s proprietary algorithm scans large amounts of textual data from online media platforms and databases.

These companies are then separated into four categories: cryptocurrencies payees, mining enablers, solution providers, and cryptocurrency users.

Each of these categories is allowed up to 15 holdings in the ETF. Each category capped at a total allocation of 40% and individual companies maxed at 7% of the fund.

KOIN provides ample exposure to semiconductor and FAAMG stocks. 

This is because the top technology companies, like Microsoft and Amazon, have shown just enough interest in blockchain to get picked up by the index’s algorithm.

KOIN’s top five holdings are Salesforce (CRM), Intel (INT), NVIDIA (NVDA), Visa (V), and Mastercard (MA).

#4. First Trust Indxx Innovative Transaction & Process ETF (LEGR)

  • Total Returns TTM: +36%
  • Expense Ratio: 0.65%
  • Annual Dividend Yield: 0.94%
  • Assets Under management: $140M
  • Inception Date: January 24, 2018
  • Issuer: First Trust
  • Category: Large Cap Blend Equities
  • Number of Holdings: 101

LEGR tracks an index of global equities based on their exposure to developing or usage of blockchain technology.

LEGR categorizes these companies similarly to KOIN but uses a tiered index weighting methodology. Firms are separated into three fields of blockchain infrastructure:

  1. Active Enablers – firms developing blockchain tech, products, or services for internal use or sale
  2. Active Users – firms using blockchain technology offered by an Active Enabler
  3. Active Explorer – firms that have announced their intention to incorporate blockchain into their business

The fund’s top five holdings are Sberbank Russia (SBER), Public Joint Stock Company Gazprom (OGZD), VMware (VMW), Salesforce (CRM), and Baidu (BIDU). 

#5. Global X Blockchain ETF (BKCH)

  • Total Returns TTM: N/A
  • Expense Ratio: 0.50%
  • Annual Dividend Yield: N/A
  • Assets Under management: $67M
  • 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. 

It high concentration in the best bitcoin mining stocks, also known as CHARM stocks, will enable it to outperform its peers. 

For example, 18% of BKCH is allocated to Marathon (MARA), a North American miner that has over 6,000 BTC on its balance sheet and has no plans to sell them. 

BKCH’s top five holdings include Marathon (18%), Coinbase (13%), Riot Blockchain (9%), Hut 8 Mining (8%), and Hive Blockchain (6%). 

>> Learn More: Best Crypto Stocks

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. Additionally, the ETF has benefited from its large allocation to Square, one of the best-performing stocks in recent years. 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, 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 Blockhain (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.

Blockchains will continue to redefine the way humans transact and exchange goods, and funds that capture this innovation will certainly benefit moving forward.

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This article is for informational purposes only. It is not intended to be investment advice. 

Sean Graytok
Sean Graytok
Sean is a student of the financial and technology industry. He is interested in the people and companies who are driving the innovation that will change our future.