Blockchain

physical bitcoin on pile of traditional currency

Investing in the blockchain industry is a relatively new phenomenon. Here’s a look at how to get started on investing in blockchain ETFs.

Cryptocurrency investors have experienced a real rollercoaster over the last few years — so is investing in blockchain exchange-traded funds (ETFs) worth considering?

The likes of bitcoin, ethereum and ripple have all reached incredible highs and then crashed, and investors have seen big gains and big losses in tandem with those moves. The cryptocurrency space remains volatile but exciting, and many are interested in how to enter and make money in this developing sector.

However, depending on how you look at it, perhaps an even bigger story is blockchain, the technology behind cryptocurrencies. Blockchain is the mechanism by which digital currencies are “mined” into existence, and it has become a popular investment in its own right for savvy investors.


Case in point — a range of blockchain technology stocks have emerged, creating a wider array of blockchain companies in the market. What's more, large companies like Meta Platforms (NASDAQ:FB), IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT) and Toyota (NYSE:TM) have invested in blockchain. These corporations see the potential for blockchain to play a role in driverless vehicles, food safety and fintech.

For those new to the blockchain investment space, deciding on a specific company to invest in may seem overwhelming, especially with the current uncertainty and price movements in the market.

That’s where ETFs come in. In simple terms, ETFs are marketable securities that track an index, a commodity, bonds or a basket of assets like an index fund. ETFs trade like a stock, and each ETF owns its underlying assets, dividing them up into shares that are available to investors.

While blockchain investing is relatively new, more and more data on the space is becoming available, and opportunities are opening up. For those interested in diving into the market using ETFs, the list below includes the top five blockchain ETFs by total assets, as per information on ETF.com as of June 16, 2022.

1. Amplify Transformational Data Sharing ETF (ARCA:BLOK)

Total assets: US$539.12 million

The Amplify Transformational Data Sharing ETF launched in January 2018, and has had its share of ups and downs.

This fund has exposure to investing in blockchain through a blend of industries, including banks, computers, telecommunications and media. It invests in various levels of blockchain companies, such as those whose operations are directly involved in blockchain applications, companies that have investments in blockchain technology and companies that are part of a blockchain consortium committed to the technology’s advancement.

Amplify is an actively managed blockchain ETF, which makes it stand out against the other ETFs on this list. It has 49 holdings with an expense ratio of 0.71 percent. The ETF’s top holdings include IBM, Core Scientific (NASDAQ:CORZ) and Overstock.com (NASDAQ:OSTK).

2. Siren NASDAQ NexGen Economy ETF (NASDAQ:BLCN)

Total assets: US$127.46 million

The Siren NASDAQ NexGen Economy ETF launched in January 2018. Its holdings are principally focused on companies that are involved in the research, development and application of blockchain technology.

This blockchain ETF has 64 holdings with an expense ratio of 0.68 percent. Mastercard (NYSE:MA), Plus500 (LSE:PLUS) and Advanced Micro Devices (NASDAQ:AMD) are among its top holdings.

3. First Trust Indxx Innovative Transaction & Process ETF (NASDAQ:LEGR)

Total assets: US$122.3 million

The First Trust Indxx Innovative Transaction & Process ETF also launched in January 2018; it is a passive index fund. First Trust made this choice because it does not believe that anyone is currently adequately qualified to lead in the blockchain space given that it is such a new industry.

First Trust has two types of companies it selects from: blockchain users and blockchain developers. These include companies like IBM and Microsoft. The fund consists of 105 holdings, including companies like VMWare (NYSE:VMW), Mastercard and Honeywell (NASDAQ:HON). It has an expense ratio of 0.65 percent.

4. Bitwise Crypto Industry Innovators ETF (ARCA:BITQ)

Total assets: US$51.1 million

Fourth on this blockchain ETFs list is the Bitwise Crypto Industry Innovators ETF. This ETF listed in May 2021 and tracks an index of industry pioneering companies that generate the majority of their revenue from crypto business activities.

Billed as the first crypto industry ETF, the fund offers pure-play exposure to companies in the crypto sector and has an expense ratio of 0.85 percent. The ETF has 30 holdings, three of which are MicroStrategy (NYSE:MSTR), Coinbase Global (NASDAQ:COIN) and Riot Blockchain (NASDAQ:RIOT).

5. Global X Blockchain ETF (NASDAQ:BKCH)

Total assets: US$49.77 million

Launched in July 2021, the Global X Blockchain ETF is a newer blockchain ETF.

It tracks the price and yield performance of the Solactive Blockchain Index with a focus on companies in digital asset mining, blockchain and digital asset transactions, blockchain applications and blockchain and digital asset hardware, as well as blockchain and digital asset integration.

At 0.5 percent, this final blockchain ETF has the lowest expense ratio on the list. Global X Blockchain has 25 holdings, including Coinbase Global, Marathon Digital (NASDAQ:MARA) and Riot Blockchain.

This is an updated version of an article first published by the Investing News Network in 2017.

Don’t forget to follow us @INN_Technology for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

How to invest in Blockchain:

MARKETS

Markets
TSX18444.22+2.38
TSXV594.13+11.54
DOW28725.51-500.10
S&P 5003585.62-54.85
NASD10575.62-161.89
ASX6474.20-80.80

COMMODITIES

Commodities
Gold1660.60+1.00
Silver19.03+0.01
Copper3.39-0.03
Palladium2167.88+6.38
Platinum864.79+4.79
Oil79.74-1.49
Heating Oil3.23-0.07
Natural Gas6.83-0.05

DOWNLOAD FREE REPORTS

×