What is Blockchain ETF: Functions & Top ETFs List

Wondering how to tap into the fast-growing Blockchain Technology sector without purchasing Cryptocurrencies directly? Knowing What is Blockchain ETFs could be your subsequent one-stop solution! These innovative investment funds offer a diversified and professional way to gain exposure to companies involved in Blockchain Technology. Taking the Market and Market research into consideration, the global Blockchain market is set to witness a CAGR of 66.2% from the year 2022 to 2027.

Yet the question that arises is, What is Blockchain ETFs exactly, and how do they work so efficiently for investors seeking exposure to Blockchain technology? This blog will unplug the curtains from these trending queries. You will also explore the best available Blockchain ETFs, their meaning, and more.

Table of Contents

1) Understanding What is Blockchain ETF

2) How Does a Blockchain ETF Work?

3) Top Blockchain ETFs in the Market

4) Why Invest in Blockchain ETFs?

5) How to Invest in Blockchain ETFs?

6) Cryptocurrency vs Blockchain ETFs

7) Conclusion

What is Blockchain ETF? 

Blockchain ETFs are investment funds that focus on companies leveraging or benefiting from Blockchain technology. Blockchain, which is widely used in Cryptocurrency transactions, also finds its applications in areas like healthcare and video streaming.

These ETFs allow investors to own a group of Blockchain-related companies in one investment. Some of these companies may use Blockchain for their operations or even hold Cryptocurrency on their balance sheets. As of January 2025, there are six Blockchain ETFs available in the U.K., offering investors a diversified way to participate in the growing Blockchain industry.

How Does a Blockchain ETF Work?

Blockchain ETFs allow investors to own a Blockchain-related stock group through a single instrument that trades like a regular exchange stock. Here is how the entire system works:

1) Passive Management: Indexes like the Nasdaq Blockchain Economy Index (through which most Blockchain ETFs are managed passively) select companies based on a "Blockchain Score," which measures their involvement and potential in blockchain technology.

2) Index Holdings: The top companies are included in the index, and its holdings are updated every six months. This ensures that the ETF reflects the most relevant and promising Blockchain companies.

3) Active Management: However, some Blockchain ETFs, like the Amplify Transformational Data Sharing ETF (BLOK), utilise the applications of active management. These funds rely on managers to pick stocks they believe will perform best in the Blockchain space.

4) Revenue Focus: BLOK then targets companies generating substantial revenue from Blockchain-related technologies and adjusts its portfolio as new opportunities emerge. This flexible strategy seeks to capitalise on the evolving Blockchain sector.

5) Industry Range: Blockchain ETFs often invest in a range of industries, including finance, technology, IT services, and biotechnology. This diversification helps spread risk across different sectors.

6) Well-known Companies: They typically hold shares in well-known companies like Coinbase, MicroStrategy, and Accenture. These companies are leaders in their fields and have significant involvement in Blockchain technology.

7) Global Exposure: While most investments are concentrated in North American companies, Blockchain ETFs also include businesses from Asia and Europe. This approach offers investors global exposure to innovative companies utilising Blockchain technology.

Top Blockchain ETFs in the Market

There are numerous Blockchain ETFs that are available for investment. Below, we have listed those ETFs in detail:   

1) VanEck Digital Transformation ETF (DAPP)

The VanEck Digital Transformation ETF (DAPP) was launched in April 2021. It manages and tracks the MVIS Global Digital Assets Equity Index in a passive way by keeping a strong focus on companies that are involved in Cryptocurrency and Blockchain technology. 

The fund comprises a total asset of £162 million under management and a 0.51% Expense Ratio, making it a budget-friendly investor’s choice. Moreover, DAPP also offers exposure at the global level, with 34.53% of its holdings based outside the U.S. (as of January 2025). This diversification adds an international dimension to its portfolio.

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2) Amplify Transformational Data Sharing ETF

The Amplify Transformational Data Sharing ETF is among the most prominent funds focused on the Cryptocurrency and digital asset market. It manages £743 million in assets under management as of 2025.

Even though it doesn't invest in Cryptocurrencies directly, it's an excellent platform to begin your quest for the top Crypto sector ETFs. The product has an annual Cost Ratio of 0.76%. This means that for every investment of £1,000 annually, there is a deduction of £7.60 in fees from the annual fund's performance. 

The Amplify Transformational Data Sharing ETF holds 51 stocks in companies. It was introduced in January 2018, making it one of the most renowned ETFs on this list. However, it is still a relatively new financial product in the broader scheme.

The fund's top assets include the Crypto Trading platform Coinbase Global (NASDAQ: COIN) and the Semiconductor giant Nvidia (NASDAQ: NVDA). These platforms produce GPUs, serving as hardware for crypto mining essentials.

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3) Global X Blockchain ETF

The Global X Blockchain ETF goes beyond Cryptocurrencies by focusing on Blockchain technology. It invests in 25 IT and Bitcoin mining companies that drive Crypto innovation and support the underlying Blockchain infrastructure.

However, this is a new ETF product launch, which started in July 2021. The fund's annual cost ratio is approximately 0.5%. This new fund is worth exploring if you are looking for centric investing exposure to Crypto miners and Blockchain-related tech businesses like Coinbase.  

4) First Trust Indxx Innovation Transaction & Process ETF  

Another large Crypto bet is the First Trust Indxx Innovative Transaction & Process ETF. The portfolio contains 103 stocks (excluding cash, as of Jan 2025). This makes it the most diverse Crypto ETF on this list.

First Trust is also a well-established organisation known for its extensive investment products range. This reputation assures investors concerned about the Funds Manager's track record and credibility.

The annual cost ratio of the First Trust Indxx Innovative Transaction & Process ETF is 0.65%, making it one of the cheaper alternatives in the market.  

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5) Siren Nasdaq NexGen Economy ETF  

Another fund that targets companies' development and utilisation of Blockchain technology is the Siren Nasdaq NexGen Economy ETF. Even though its assets under management are significantly less than those of Amplify's similar ETF product, it still offers a slightly different perspective on this market.

The ETF consists of 64 stocks, with an expanding focus on general Crypto or Blockchain segment technology, such as IBM (NYSE: IBM). It serves as a top holding known for its Blockchain-based solutions and enterprise technologies.

It also includes traditional lender shares and digital payment networks like American Express (NYSE: AXP) and Visa (NYSE: V), which have begun exploring Cryptocurrency. This approach provides a more diverse way to invest in Cryptocurrency industrial growth.

6) Bitwise Crypto Industry Innovators ETF (BITQ)

The Bitwise Crypto Innovators 30 Index’s performance is tracked by the Bitwise Crypto Industry Innovators ETF (BITQ), a passively managed investment fund. This index consists of 30 stocks from Cryptocurrency-sector invested businesses. These include Crypto mining operations, mining equipment suppliers, and companies that provide financial services.

To be listed in the Bitwise Crypto Innovators 30 Index, a business must generate at least 75% of its income from Cryptocurrencies alone. Alternatively, the company must hold 75% of its net assets in Bitcoin or another Crypto holding.

7) Fidelity Crypto Industry and Digital Payments ETF (FDIG)

The Fidelity Crypto Industry and Digital Payments ETF (FDIG) was launched in April 2022. FDIG is typically compared with the Digital Payments Index and Fidelity Crypto Industry. This index tracks the performance of companies that are involved in Blockchain, Cryptocurrency, and digital payments.

Currently, FDIG has about 35 stocks, of which the tech industry holds 63% of these stocks, and the other 33% of those stocks are in financial services.

8) Invesco CoinShares Global Blockchain UCITS ETF Acc

The Invesco CoinShares Global Blockchain UCITS ETF Acc, launched on March 11, 2019, tracks the Blockchain Global Equity Index for Coinshares, including global Blockchain technology companies.

The ETF replicates the index's performance using a sampling technique. It has a total expense ratio (TER) of 0.65% per year, and any dividends are reinvested into the fund. With £162 million in assets under management (as of January 2025), it is a sizable fund.

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Why Invest in Blockchain ETFs?

Investing in a Blockchain ETF is a great way to attain Cryptocurrency market exposure without the complexities of individualised Cryptocurrency’s buying, holding, and selling. Here are the key reasons behind investing in Blockchain ETFs:

1) All-in-one-solution 

Buying a Blockchain ETF allows you to invest in several Cryptocurrencies without separately buying each one. This is crucial for many investors looking for more investment control but need more time or money to research every available Cryptocurrency.  

2) Simple Approach 

Blockchain ETFs provide an easy way for investors to access a diversified portfolio of cryptocurrencies through a single investment. Instead of buying individual tokens, these funds hold a mix of Blockchain-related assets. This approach minimises the complexity of managing multiple investments while diversifying risk.

3) Low Fees 

Blockchain ETFs typically come with lower fees compared to standard investment options such as mutual funds or individual stocks.  This approach minimises the complexity of managing multiple investments while diversifying risk.

How to Invest in Blockchain ETFs?

Investing in Blockchain ETFs can be a strategic way to seek exposure to the Blockchain Technology sector without buying Cryptocurrencies directly. Here are detailed steps to help you get started:

1) Understand Blockchain ETFs

Before starting, it’s important to understand what exactly Blockchain ETFs are and the key details that make them distinct. These investment funds focus on companies involved in Blockchain technology. They offer a diversified and simplified way to invest in the growing Blockchain ecosystem without directly purchasing Cryptocurrencies.

2) Research Available ETFs

When researching available Blockchain ETFs, research their historical performance to assess returns over time. Review the companies included in each ETF to ensure they align with your investment goals. Additionally, consider the expense ratio, as lower costs can contribute to higher net returns.

3) Evaluate Your Investment Goals

Evaluate your investment goals by first assessing your tolerance for risk to understand the volatility level you can comfortably manage in your portfolio. Additionally, define the timeline of your investment, as Blockchain ETFs can be tailored for both short-term and long-term financial objectives.

4) Choose a Brokerage Account

Open a Brokerage account with a platform that offers your interested Blockchain ETFs. Additionally, define the timeline of your investment, as Blockchain ETFs can be tailored for both short-term as well as long-term financial objectives.

5) Place Your Order

Choose between placing a market order, which is executed at the current price, or a limit order. After that, determine the amount of money you want to invest in the Blockchain ETF to align with your financial goals.

Monitor your investment through regular performance tracking and make adjustments as needed to align with market conditions and your financial goals. Also, rebalance your portfolio on a periodic basis to maintain your asset allocation and ensure it stays on track.

7) Stay Informed

Stay up to date with blockchain industry trends and evaluate their potential impact on your investments. Additionally, remain aware of regulatory changes that could shape the future of Blockchain technology and related assets.

Cryptocurrency vs Blockchain ETFs 

Let’s explore some key differences between Cryptocurrency and Blockchain ETFs. This will help you better understand their unique features and investment potential.
 

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Conclusion

Blockchain ETFs invest in companies involved in the development and use of Blockchain technology, as well as those poised to benefit from the advancements of the Future of Blockchain Technology. While the technology is relatively new, and many of these funds have limited track records, investors looking to get in on the ground floor may consider adding these ETFs to their portfolios.

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