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Blockchain forms the backbone of cryptocurrencies like Bitcoin and Ethereum, though its applications are much more far reaching, potentially revolutionizing any work that requires database recordkeeping and beyond.
For investors looking to capitalize on the exciting potential of this technology, blockchain exchange-traded funds (ETFs) let you easily invest in hundreds of companies pursuing blockchain-based strategies.
To guide your investments in this new category of ETFs, Forbes Advisor has reviewed the blockchain ETFs available on the market today and filtered them by total assets under management (AUM).
Our editors are committed to bringing you unbiased ratings and information. Our editorial content is not influenced by advertisers. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the investing methodology for the ratings below.
Launched in January 2018, The Amplify Transformational Data Sharing ETF was the first exchange-traded fund dedicated to blockchain technology. This first-mover advantage has helped the fund excel in total AUM and overall liquidity.
An actively managed ETF, BLOK aims to invest in the shares of companies that are developing or using blockchain technologies. The fund targets crypto exchanges, companies with exposure to cryptocurrency mining and developers of new blockchain applications.
The Global X Blockchain ETF is a passively managed fund that invests in companies positioned to benefit from the adoption of blockchain technology. This includes crypto mining companies, crypto exchanges and companies developing new blockchain applications.
The fund’s benchmark is the Solactive Blockchain Index. This index tracks companies around the world that are focused on blockchain development, cryptocurrency innovation and cryptocurrency mining hardware.
The Bitwise Crypto Industry Innovators ETF is a passively managed fund that tracks the performance of the Bitwise Crypto Innovators 30 Index. This index includes 30 stocks of companies that are deeply involved in cryptocurrency markets, including crypto mining, mining equipment suppliers and financial services companies.
To be included in the fund’s benchmark index, a company must generate at least 75% of their revenues from cryptocurrency or have 75% of their net holdings in Bitcoin or another crypto asset. Companies in the index account for 85% of BITQ’s holdings—the remaining 15% include other large-cap stocks that are tangentially involved in crypto or hold at least $100 million in Bitcoin, Ethereum or another crypto asset.
The VanEck Digital Transformation ETF (DAPP) is a passively managed fund that was launched in April 2021. DAPP tracks the performance of the MVIS Global Digital Assets Equity Index, which holds the stocks of companies active in cryptocurrency and blockchain.
It’s worth noting that the VanEck Digital Transformation ETF has good exposure to international stocks. As of April 2023, 34% of its holdings were based outside the U.S.
Launched in April 2022, 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, 61% in financial services and 37% in the tech industry. Like many blockchain ETFs, this allocation suggests the fund’s portfolio has shifted from direct investments in cryptocurrency technologies to more investments in the digital payments category.
The Siren Nasdaq NexGen Economy ETF is a passively managed fund that launched in January 2018. BLCN tracks the Nasdaq Blockchain Economy Index, which includes the stocks of companies that develop blockchain technology or use it for their own businesses.
BLCN offers a very well diversified portfolio of boldface name stocks that are involved in the blockchain economy.
The First Trust SkyBridge Crypto Industry and Digital Economy ETF is an actively managed fund that launched in September 2021. CRPT aims to invest at least 80% of its net assets in companies active in the cryptocurrency economy.
One note of interest is that the founder and managing partner of SkyBridge is former Trump administration chief of staff, Anthony Scaramucci.
“We believe that cryptocurrency adoption represents the biggest macro trend since the commercialization of the internet, and we are excited to offer investors access to a portfolio of the leading companies in this ecosystem,” said Scaramucci on the launch of CRPT.
*All data is sourced from fund filings and StockRover.com, current as of May 7, 2024.
The author(s) held no positions in the securities discussed in the post at the original time of publication.
There are currently more than 25 blockchain and Bitcoin ETFs approved by the SEC for trading in the United States. This includes ETFs trading in both publicly-traded blockchain companies and Bitcoin futures.
Our methodology for selecting the best blockchain ETFs included in this list is the following:
This process left us with seven funds. There are more blockchain ETF filings waiting for SEC approval. As the world of blockchain ETFs continues to evolve, we will offer a more comprehensive methodology that selects the best from an even larger universe of similar funds.
Blockchain is a digital ledger that records data—frequently cryptocurrency transactions, though it can handle any type of data—and distributes it across a broad network of computer systems.
All of the nodes participating in the network hold identical copies of the digital ledger, which is a big reason why it can be difficult (but not impossible) to hack or cheat the system.
It’s helpful to break down the word blockchain to grasp how the system works.
Computers that participate in the network encode data—smart contracts, Bitcoin transactions or supply chain information for a logistics company, for instance—into “blocks” that are added to the continuously evolving digital ledger, aka the “chain.” As new blocks of information are added, duplicate copies of the entire database are updated on each node.
All nodes must confirm the legitimacy of new data before it is added to the chain. For some blockchains, that means a majority of nodes confirm that individual crypto coins have not been spent more than once. Alternatively for a logistics company, that could mean different nodes register or verify the receipt or dispatch of shipments.
Blockchain ETFs are thematic exchange-traded funds that own the stocks of companies that use or develop blockchain technology. They tend to invest in a wider variety of assets than Bitcoin ETFs or crypto ETFs, which focus more narrowly on tracking the price of individual cryptocurrencies.
While cryptocurrencies like Bitcoin and Ethereum are the most popular use for blockchain today, the technology offers the potential to serve a very wide range of applications that go well beyond crypto. Take Walmart’s Canadian division, which used blockchain technology to create an automated system for managing invoices and payments for its logistics partners.
The ETFs listed above invest in hundreds of different companies. They can be broken down into a few broad categories:
It’s a buzzy, exciting technology, but blockchain is only in the early stages of development. Cryptocurrencies have been making dramatic headlines for their outsized gains and tremendous losses, but more pragmatic blockchain applications have had a much lower profile.
Large, established public companies have dabbled in blockchain businesses while smaller, more focused firms have put blockchain and crypto at the core of their operations. In either case, there has yet to be a killer app that has made the case for blockchain as a core part of the future of business and technology.
This means investing in the stocks of just one or a few blockchain or crypto-focused companies is very risky. That makes choosing a diversified blockchain ETF a less risky way to get exposure to the industry. The blockchain ETFs on our list invest in dozens or even hundreds of stocks, providing plenty of diversification in a single fund.
Given how rapidly the blockchain space is evolving, choosing a blockchain ETF for your portfolio could be the best possible choice for investing in the industry.
Michael Adams held a position in NVIDIA Corp at the time of this publication.
Michael Adams is lead editor, investing at Forbes Advisor. He’s researched, written about and practiced investing for nearly two decades. As a writer, Michael has covered everything from stocks to cryptocurrency and ETFs for many of the world’s major financial publications, including Kiplinger, U.S. News and World Report, The Motley Fool and more. Michael holds a master’s degree in philosophy from The New School for Social Research and an additional master’s degree in Asian classics from St. John’s College.
