Cryptocurrency investors have experienced a real rollercoaster in the last few years — the likes of Bitcoin, Ethereum and Ripple have had incredible highs and crashes, and investors have seen big gains and losses in tandem.
Despite that volatility, many market participants are still interested in how to enter and make money in the developing cryptocurrency sector. But depending on how you look at it, perhaps the bigger story is blockchain technology.
Blockchain is the mechanism through which digital currencies like Bitcoin are “mined” into existence, and it’s become a popular investment in its own right for savvy investors. Case in point — over the last few years, an array of major blockchain technology stocks have emerged. What’s more, large companies like Meta Platforms (NASDAQ:FB), IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT) and Toyota (NYSE:TM) have invested in blockchain technology. These corporations see the potential for blockchain to play a role in sectors such as driverless vehicles, food safety and fintech.
For those new to the blockchain space, deciding on a specific company to invest in may seem overwhelming, especially with the current market uncertainty around cryptocurrency price movements.
That’s where exchange-traded funds (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 on an exchange, 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 August 28, 2023.
1. Amplify Transformational Data Sharing ETF (ARCA:BLOK)
Total assets: US$463 million
The Amplify Transformational Data Sharing ETF launched in January 2018 and has had its share of peaks and troughs.
This fund has exposure to blockchain technology through a blend of companies in various industries, including banks, computers, telecommunications and media. It invests in diverse 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 48 holdings with an expense ratio of 0.75 percent. The Amplify Transformational Data Sharing ETF’s top holdings include MicroStrategy (NYSE:MSTR), Coinbase Global (NASDAQ:COIN) and SBI Holdings (TSE:8473).
2. First Trust Indxx Innovative Transaction & Process ETF (NASDAQ:LEGR)
Total assets: US$108 million
The First Trust Indxx Innovative Transaction & Process ETF also launched in January 2018. First Trust has two types of companies it selects from for its portfolio: companies that employ blockchain and firms that develop it.
The fund consists of 101 holdings, including companies like NVIDIA (NASDAQ:NVDA), Amazon (NASDAQ:AMZN) and VMWare (NYSE:VMW). It has an expense ratio of 0.65 percent.
3. Bitwise Crypto Industry Innovators ETF (ARCA:BITQ)
Total assets: US$79 million
Third 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 sector and has an expense ratio of 0.85 percent. The ETF has 28 holdings, three of which are MicroStrategy, Coinbase Global and Riot Blockchain (NASDAQ:RIOT).
4. Global X Blockchain ETF (NASDAQ:BKCH)
Total assets: US$69 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 a variety of blockchain segments, such as, but not limited to, digital asset mining, blockchain and digital asset transactions, blockchain applications and blockchain and digital asset hardware.
At 0.5 percent, this blockchain ETF has the lowest expense ratio on the list. Global X Blockchain has 26 holdings, including Coinbase Global, Marathon Digital Holdings (NASDAQ:MARA) and Hut 8 Mining (NASDAQ:HUT).
5. Siren NASDAQ NexGen Economy ETF (NASDAQ:BLCN)
Total assets: US$66 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 66 holdings with an expense ratio of 0.68 percent. MicroStrategy, Coinbase Global and Overstock.com (NASDAQ:OSTK) are among its top holdings.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
