3 Blockchain ETFs for Q1 2022
Nov 18, 2021
Blockchain exchange-traded funds (ETFs) invest in stocks of firms that use blockchain technology in their operations or profit from it in some manner. Blockchain is a distributed ledger that is made up of complicated pieces of digital data that is rapidly being utilized in banking, investment, cryptocurrency, and other industries.
Despite the fact that blockchain is a relatively new technology, many of the firms involved in it are well-established. International Business Machines Corp. (IBM), Oracle Corp. (ORCL), and Visa Inc (V) are just a few examples.
Due to the technology's relationship with the volatile cryptocurrency market, many investors may be hesitant to risk an investment in blockchain. Blockchain, on the other hand, is not the same as cryptocurrencies, and blockchain ETFs only invest in equities of regulated businesses, many of which are large blue-chip technology companies, rather than directly in cryptocurrency.
In the United States, three blockchain ETFs are available, excluding inverse and leveraged ETFs and funds with less than $50 million in assets under management (AUM). The Bitwise Crypto Industry is not included in this list. The Bitwise Crypto Industry Innovators ETF (BITQ), the VanEck Digital Transformation ETF (DAPP), and the Global X Blockchain ETF (BKCH) are not included in our rankings because they were all created within the last year and do not have adequate trading history.
While there is no industry-specific benchmark index for blockchain, the wider IT sector is a good place to start. As of Nov. 11, 2021, the S&P 500 Information Technology Sector Index had outpaced the wider market in the previous year, with 1-year trailing total returns of 37.4 percent vs 32.1 percent for the S&P 500. Based on previous performance, the Amplify Transformational Data Sharing ETF is the best-performing blockchain ETF for Q1 2022. (BLOK). The three blockchain ETFs are discussed below. All figures are as of November 12, 2021.
Amplify Transformational Data Sharing ETF (BLOK)
- Performance Over One-Year: 138.5%
- Expense Ratio: 0.71%
- Annual Dividend Yield: 1.09%
- Three-Month Average Daily Volume: 475,561
- Assets Under Management: $1.6 billion
- Inception Date: Jan. 16, 2018
- Issuer: Amplify Investments
BLOK is an actively managed exchange-traded fund that invests at least 80% of its net assets in stocks of firms that develop and use blockchain technology. It employs a hybrid approach, investing in a mix of value and growth securities with varying market capitalizations from throughout the world, with a focus on software, IT services, and capital markets firms.
Galaxy Digital Holdings Ltd. (GLXY: TSE), a Canadian financial services and investment management firm focused on cryptocurrency and blockchain; class A shares of Silvergate Capital Corp. (SI), the holding company for a bank serving the digital currency industry; and class A shares of Coinbase Global Inc. (COIN), the operator of a cryptocurrency exchange platform, are the fund's top three holdings.
Siren Nasdaq NexGen Economy ETF (BLCN)
- Performance Over One-Year: 43.8%
- Expense Ratio: 0.68%
- Annual Dividend Yield: 0.61%
- Three-Month Average Daily Volume: 40,662
- Assets Under Management: $313.9 million
- Inception Date: Jan. 17, 2018
- Issuer: SRN Advisors
The Nasdaq Blockchain Economy Index, which analyzes the performance of enterprises creating, studying, supporting, inventing, or employing blockchain technology, is tracked by BLCN. 5 The ETF invests in both growth and value companies, using a hybrid approach. Bakkt Holdings Inc. (BKKT), a digital asset marketplace operator, class A shares of Silvergate Capital Corp., and Marathon Digital Holdings Inc. (MARA), a digital asset technology business that mines cryptocurrencies, are BLCN's top three holdings.
First Trust Indxx Innovative Transaction & Process ETF (LEGR)
- Performance Over One-Year: 33.0%
- Expense Ratio: 0.65%
- Annual Dividend Yield: 1.26%
- Three-Month Average Daily Volume: 20,136
- Assets Under Management: $141.0 million
- Inception Date: Jan. 24, 2018
- Issuer: First Trust
The Indxx Blockchain Index is tracked by LEGR, and it measures the performance of firms who use, invest in, create, or have products that are positioned to gain from blockchain technology. The ETF typically invests at least 90% of its net assets in the index's equities securities and has a total of 101 holdings (excluding cash), the majority of which are in the banking and information technology industries.
Advanced Micro Devices Inc. (AMD), a semiconductor business, NVIDIA Corp. (NVDA), a graphics processing unit maker, and salesforce.com Inc. (CRM), a cloud-based customer relationship management software company, are LEGR's top three holdings.
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