Blockchain exchange-traded funds (ETFs) own stocks in companies that have business operations in blockchain technology or profit from it in some way. Blockchain is made up of complex blocks of digital information and is increasingly used in banking, investing, cryptocurrency, and other sectors.
While blockchain is a relatively new technology, many of the companies that operate in the space are well established. Some examples include International Business Machines Corp. (IBM), Oracle Corp. (ORCL), and Visa Inc. (V).
Many investors may be wary of risking an investment in blockchain due to the technology’s association with the volatile cryptocurrency market. However, blockchain is not the same thing as cryptocurrency, and blockchain ETFs invest only in stocks of regulated companies, many of which are big blue-chip technology firms and not directly in cryptocurrency.
- The three blockchain exchange-traded funds (ETFs) outperformed the broader market over the last year.
- These three ETFs, ranked by one-year trailing total return, are BLOK, BLCN, and LEGR.
- The top holdings of these ETFs are class A shares of MicroStrategy Inc., class A shares of Coinbase Global Inc., and NVIDIA Corp., respectively.
Three blockchain ETFs trade in the United States, excluding inverse and leveraged ETFs as well as funds with less than $50 million in assets under management (AUM). This list excludes the Bitwise Crypto Industry Innovators ETF (BITQ), which launched in May 2021 and does not have enough trading history to be included in our rankings.
The three blockchain ETFs have outperformed the broader market over the past 12 months, posting higher total returns than the S&P 500’s total return of 34.0%, as of Aug. 10, 2021. The best-performing blockchain ETF for the fourth quarter (Q4) of 2021, based on performance over the past year, is the Amplify Transformational Data Sharing ETF (BLOK). We examine the three blockchain ETFs below. All numbers are as of Aug. 10, 2021.
- Performance Over One-Year: 112.9%
- Expense Ratio: 0.71%
- Annual Dividend Yield: 1.30%
- Three-Month Average Daily Volume: 448,406
- Assets Under Management: $1.2 billion
- Inception Date: Jan. 16, 2018
- Issuer: Amplify Investments
BLOK is an actively managed ETF that invests a minimum of 80% of its net assets in stocks of companies engaged in the development and utilization of blockchain technologies. It follows a blended strategy, investing in a mix of value and growth stocks of various market capitalizations around the world, and is composed mostly of companies operating within the software and services and diversified financials industries.
The fund’s top three holdings are class A shares of MicroStrategy Inc. (MSTR), a provider of enterprise software platforms; class A shares of Square Inc. (SQ), a financial services and digital payments company; and Hut 8 Mining Corp. (HUT), a Canada-based bitcoin mining and blockchain infrastructure company.
- Performance Over One-Year: 38.9%
- Expense Ratio: 0.68%
- Annual Dividend Yield: 0.63%
- Three-Month Average Daily Volume: 55,737
- Assets Under Management: $289.1 million
- Inception Date: Jan. 17, 2018
- Issuer: SRN Advisors
BLCN tracks the Nasdaq Blockchain Economy Index, which gauges the performance of companies involved in developing, researching, supporting, innovating, or utilizing blockchain technology. The ETF follows a blended strategy, investing in growth and value stocks, and its top three holdings are class A shares of Coinbase Global Inc. (COIN), the operator of a cryptocurrency exchange platform; class A shares of Square Inc., described above; and class A shares of MicroStrategy Inc., described above.
- Performance Over One-Year: 36.4%
- Expense Ratio: 0.65%
- Annual Dividend Yield: 1.12%
- Three-Month Average Daily Volume: 18,962
- Assets Under Management: $117.8 million
- Inception Date: Jan. 24, 2018
- Issuer: First Trust
LEGR tracks the Indxx Blockchain Index, which gauges the performance of companies that actively utilize, invest in, develop, or have products that are positioned to benefit from blockchain technology. The ETF normally invests a minimum of 90% of its net assets in equity securities that comprise the index and has a total of 100 holdings, excluding cash, most of which operate in the information technology and financial industries.
LEGR’s top three holdings include NVIDIA Corp. (NVDA), a graphics processing unit manufacturer; Oracle Corp. (stock symbol above), a multinational computer technology company; and Advanced Micro Devices Inc. (AMD), a semiconductor manufacturer.
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.