Blockchain ETFs are the exchange-traded funds that either track the price movement of bitcoin and other cryptocurrencies or invest in stocks of companies that use blockchain technology to transform business applications. With the technological advancement and rampant growth of blockchain technology, blockchain ETFs can be great additions to investment portfolios, however, the industry is still relatively new so investors should be prepared for volatility.
Investors are becoming increasingly interested in investing in blockchain technology as a specific sub-sector under the technology or finance sectors. Blockchain ETFs allow investors to take advantage of the opportunity and become a part of the disruptive growth, increased efficiency, and improved utilization through the use of blockchain.
Ticker | Company Name | Last Price | 1-Year Return |
|---|---|---|---|
| BLOK | Amplify Transformational Data Sharing ETF | $36.58 | 87.21% |
| BLCN | Reality Shares Nasdaq NexGen Economy ETF | $24.09 | 28.55% |
| LEGR | First Trust Indxx Innovative Transaction & Process ETF | $47.23 | 30.15% |
| GFIN | Goldman Sachs Motif Finance Reimagined ETF | $0.02 | -75.00% |
| KOIN | Innovation Shares NextGen Protocol ETF | $74.00 | -5.13% |
| BKCH | AdvisorShares Sabretooth ETF | $45.40 | 105.62% |
| OGIG | O’Shares Global Internet Giants ETF | $41.88 | 37.31% |
| IGM | iShares Expanded Tech Sector ETF | $95.15 | 48.60% |
| IPAY | ETFMG Prime Mobile Payments ETF | $51.20 | 33.58% |
| VGT | Vanguard Information Technology ETF | $577.64 | 38.90% |
| XLK | Technology Select Sector SPDR Fund | $222.81 | 34.93% |
Factors to Consider Before Investing in Blockchain ETFs
Blockchain ETFs follow the performance of an underlying index. Therefore, the most efficient blockchain ETFs must have low tracking errors and low expense ratios in order to generate high returns on investment.
Investors must take into account that blockchain ETFs carry inherent risks of non-performance and the failure of the entire blockchain ecosystem. Despite being a disruptive trend, blockchain is in the nascent stage, and may or may not evolve to be successful in the years to come. Blockchain ETFs are also subject to the risks of drastic failures of new companies trying to adopt blockchain. Therefore, investors must consider both the risks and rewards before investing in blockchain ETFs.
Investors should also consider the fact that many blockchain ETFs will experience price fluctuations relative to the cryptocurrency market. For example, it’s not uncommon to see these blockchain ETFs increase in price when Bitcoin is breaking out and decrease in price when Bitcoin is breaking down (regardless of whether the ETF even holds any Bitcoin).
Which Blockchain ETFs Should I Buy?
Blockchain ETFs invest in the stocks of various finance and technology companies that use blockchain for the development and revolutionization of business processes. We have aggregated a list of the best blockchain ETFs for your reference. Please note that blockchain ETFs are not permitted by law to use the word blockchain in their names.
Investors should buy blockchain ETFs that belong to stable and well-established companies, with the ability to generate high and stable returns at low risks and low expense ratios. The geographical exposure should also be taken into account before selecting blockchain ETFs.
When choosing which blockchain ETFs you want to invest in, you should consider what type of exposure you want to the blockchain market. Are you interested in investing in disruptive blockchain technology companies or getting exposure to cryptocurrencies? The answer to the question will determine which ETFs you should add to your portfolio.
