7 Best Blockchain ETFs of December 2024
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Our top blockchain ETF choices include the Amplify Transformational Data Sharing ETF, Global X Blockchain ETF, and Bitwise Crypto Industry Innovators ETF, each offering a diversified approach to blockchain investment.
Blockchain ETFs present a less volatile option compared to direct cryptocurrency investments, appealing to investors who want exposure to blockchain technology’s growth across multiple industries.
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What is blockchain technology?
Blockchain technology extends far beyond its role as the foundation for cryptocurrencies. It marks a groundbreaking evolution in how data is gathered, stored, and shared worldwide. By distributing data across a decentralized network, blockchain provides an environment that is both highly secure and resistant to tampering.
While blockchain powers digital currencies like Bitcoin and Ethereum, its potential applications reach into industries like healthcare, real estate, and beyond, where transparency and security are critical. Its greatest strength lies in ensuring trust and reducing fraud, positioning blockchain as a transformative technology for the future of secure digital transactions.
What are blockchain ETFs?
Blockchain ETFs are investment funds traded on stock exchanges that primarily invest in companies involved in developing and implementing blockchain technologies. Unlike direct cryptocurrency investments, these ETFs offer a more stable investment into the technology underlying cryptocurrencies. They provide exposure to various sectors, including technology, finance, and others, expanding the reach and impact of blockchain.
These funds are crucial for investors seeking exposure to blockchain technology's potential without the high volatility associated with crypto. By investing in a range of companies, from startups to established tech firms, blockchain ETFs allow investors to benefit from the sector's growth while mitigating the risks of single-stock exposure.
Learn more about spot ETFs and how they expose investors to the real-time price of assets like Bitcoin and Ethereum.
How to invest in blockchain
When considering an investment in blockchain, blockchain ETFs represent a prudent choice due to their diversified nature. These ETFs empower investors to invest in a basket of companies that are either directly using or supporting the development of blockchain technology, thereby reducing the risk compared to investing in individual cryptocurrencies or stocks.
To start investing, one should look at the fund’s performance history, the sectors it covers, its assets under management (AUM), and its expense ratio. Investors should also consider how these ETFs fit into their broader investment strategy, focusing on long-term growth and technological advancements in the blockchain sector.
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Best blockchain ETFs
Here is our list of the best blockchain ETFs available, with comprehensive analysis to help you determine which ETF best aligns with your investment strategy. Whether you're looking for active management or prefer a more passive approach, these ETFs cover various aspects of the blockchain ecosystem, allowing you to diversify your portfolio while tapping into the potential of this transformative technology.
Amplify Transformational Data Sharing ETF (BLOK)
Best blockchain ETF for active investment strategies in blockchain
This actively managed ETF focuses on companies that benefit significantly from blockchain technology advancements.
Pros
Active management to capitalize on emerging blockchain opportunities.
Diverse exposure to technology and financial sectors.
Cons
Higher expense ratio at 0.76%.
Increased volatility due to active management approach.
Selected for its aggressive growth strategy and active management, BLOK is ideal for investors looking to engage with the blockchain sector dynamically.
Bitwise Crypto Industry Innovators ETF (BITQ)
Best blockchain ETF for direct exposure to the crypto sector
BITQ focuses on companies that have significant business operations in the cryptocurrency space, such as miners and hardware providers.
Pros
Direct exposure to the cryptocurrency industry's growth.
High potential for returns during cryptocurrency market rallies.
Cons
High correlation with the volatile cryptocurrency market.
Expense ratio of 0.85%.
BITQ is favored for its focus on crypto industry leaders, providing a targeted investment option for those bullish on cryptocurrencies.
First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT)
Best blockchain ETF for diversified exposure within the digital economy
CRPT invests across a range of digital economy sectors, including companies involved in digital asset trading and blockchain technology development.
Pros
Broad exposure to digital economy sectors.
Active management to leverage sector trends.
Cons
Potentially higher expense ratio at 0.85%.
Complexity in investment strategy may be challenging for new investors.
CRPT is chosen for its comprehensive approach, covering various aspects of the digital economy and offering robust potential for growth.
BKCH invests in a wide array of companies involved in blockchain technology globally, offering broad market exposure.
Pros
Global exposure to the blockchain industry.
Lower expense ratio of 0.50%, making it cost-effective.
Cons
Broad focus may dilute impact of high-performers.
Less responsive to quick shifts in technology trends.
Global X Blockchain ETF is recommended for its extensive global reach across the blockchain industry, suitable for those seeking comprehensive market coverage.
Fidelity Crypto Industry and Digital Payments ETF (FDIG)
Best blockchain ETF for low-cost investment in crypto and digital payments
FDIG offers investors an affordable path to invest in the burgeoning fields of cryptocurrency and digital payments.
Pros
Low expense ratio at 0.39%, enhancing accessibility.
Diverse holdings in both crypto-related and digital payment firms.
Cons
Blended focus might limit exposure to pure blockchain opportunities.
Risk of underperformance in sectors not directly related to blockchain.
FDIG stands out for its cost-effectiveness and balanced approach to cryptocurrency and digital payment industries.
Siren Nasdaq NexGen Economy ETF (BLCN)
Best blockchain ETF for long-term investment in blockchain technology
BLCN focuses on companies that are expected to lead blockchain technology development and implementation.
Pros
Long-term focus on blockchain technology's growth.
Invests in forward-thinking companies poised for significant development.
Cons
Higher expense ratio at 0.68%.
Long-term focus may delay immediate returns.
Selected for its visionary investment strategy, BLCN is ideal for those who believe in the transformative potential of blockchain over the long haul.
VanEck Digital Transformation ETF (DAPP)
Best blockchain ETF for targeted investments in digital transformation
DAPP specifically invests in companies that are leaders in the digital transformation space, heavily utilizing blockchain technology.
Pros
Focused on high-growth potential companies in the digital transformation sector.
Moderate expense ratio of 0.51%.
Cons
Concentrated focus may increase risk.
Dependent on the success of the digital transformation market.
DAPP is favored for its focus on digital transformation, making it an excellent choice for investors targeting specific high-growth areas within blockchain.
Cryptocurrency vs. blockchain ETFs
Cryptocurrency ETFs focus directly on tracking the prices of cryptocurrencies, offering high-risk and potentially high-return investments tied to specific digital currencies.
On the other hand, blockchain ETFs provide a broader investment in companies that develop or utilize blockchain technology, offering a more stable and diversified way to invest in the technology's broader potential.
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Best blockchain ETFs FAQs
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