Best blockchain ETFs to buy in 2024

By:

James Knight

James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.

Updated: Oct 11, 2022

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Blockchain technology is one of the fastest growing sectors on the stock market. With so many new companies springing up all the time, it can be hard to know where to put your money. This guide cuts through the noise to tell you how to invest in ETFs that give you the best chance of success.

What are the top blockchain ETFs to buy?

Investing with an ETF means you don’t have to make the tough decisions about which stocks to own; the ETF handles all of this for you. Our experts have picked out the best blockchain ETFs to buy this year and you can find them in the table below. Read on to learn more about why each one was chosen.

1. Amplify Transformational Data Sharing ETF (NYSEARCA: BLOK)

The Amplify ETF is the largest blockchain ETF available right now. It owns stocks in companies that are involved in cryptocurrency or that use blockchain technology. The ETF is actively managed, which means there’s someone in the middle making decisions over which stocks to buy and sell.

That can be good news for an ETF in this industry, because things move fast and a manager can react quickly to new developments. Current management has decided to put most of the fund’s money into companies that either provide software, or are involved in mining cryptocurrency.

Some of its largest holdings include Square, PayPal, and Coinbase, along with mining companies like Hut 8 Mining. It means the ETF can benefit from rising cryptocurrency prices but also has enough money in more diverse, stable companies to offer one of the best options for investors interested in blockchain technology.

2. Siren Nasdaq NexGen Economy ETF (NASDAQ: BLCN)

This Siren ETF invests in companies that help develop innovative blockchain technology by tracking the Nasdaq Blockchain Index. That index includes any company that commits substantial resources to creating this new technology.

What that means for the fund is that it owns quite a wide range of companies. It even holds the likes of JP Morgan and Alibaba, which means it’s likely to be more stable than a dedicated blockchain fund.

Another factor that plays into this is that its largest holding is worth just 3% of the overall fund total. That means it’s not reliant on any one company for success and gives you a well balanced overview of the industry. It does, of course, hold companies that are more naturally associated with blockchain tech. Silvergate Bank and, again, PayPal, represent two of its larger holdings.

3. First Trust Indxx Innovative Transaction & Process ETF (NASDAQ: LEGR)

The First Trust Indxx fund is another ETF that offers a low-risk way to invest in the success of blockchain technology. Like the Siren fund, it can own stock in any company that would benefit from the growth of the blockchain industry, and it casts a wide net to include as many businesses as possible.

No company makes up more than 2% of the total money invested in the fund. ETFs with weightings like that are usually stable and much less likely to be impacted by the success or failure of one company within it. That can work both ways, obviously, but in general it’s a good idea to put your money in low-risk ETFs.

To give you an idea of the range of companies in the fund; it owns stocks in as diverse industries as semiconductor manufacturing (AMD, Intel, Nvidia), banking and finance (lots of banks, as well as PayPal and Mastercard), and vehicle manufacturing (Tesla).

4. Invesco Elwood Global Blockchain UCITS ETF (LON: BCHN)

The Invesco ETF is much more focused on the blockchain industry than the previous two. It owns companies in developed and emerging markets that are involved (or could be involved) in blockchain technology. In practice, that means the majority of its holdings are based in the US, Canada, or Japan.

Its holdings are more heavily weighted towards fewer companies than the previous two as well. The top holding, Hive Blockchain, makes up about 5% of the fund. Hive, and the second largest holding, Bitfarms, are both involved in mining cryptocurrency, which again shows how much more specialised this ETF is.

The fund is rebalanced (it reorganises how much of each stock it owns) every quarter, which means it can keep up to date with the changing face of the industry. That’s helped it to achieve some spectacular success since it was first set up in the summer of 2020.

5. VanEck Digital Transformation ETF (NASDAQ: DAPP)

The final fund on this list is another that focuses almost exclusively on the cryptocurrency industry. It makes ‘pure’ blockchain plays, which means the companies it owns stocks in have to be at the forefront of driving the technology forward.

This is also a different fund in the sense that its top stocks have a large impact on how it performs. Its top five holdings, Silvergate, Coinbase, Marathon, Square, and MicroStrategy, combine for more than 40% of the assets it holds. How they perform is likely to dictate how well the fund does.

What those companies also show is how focused on cryptocurrency the VanEck fund is. Between them they spend a lot of money on either developing technology, or investing in companies that provide the innovation. It’s likely to be the most volatile ETF on the list but it’s certainly one of the most direct ways to invest in the future of blockchain tech.

Where to buy the best blockchain ETFs

To buy an ETF you need to sign up for an account with an online broker. The platforms below represent the best beginner-friendly brokers that you can get started with straight away. Follow the links in the table to sign up in just a few minutes.

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What is a blockchain ETF?

An ETF is a fund that trades on the stock market, so you can buy or sell shares in it at any time. The value of the ETF fluctuates based on the performance of the assets it holds, and these assets can be anything; stocks, commodities, or even cryptocurrencies.

The main defining feature of an ETF is that all the assets it owns are based on a single, guiding principle. Some ETFs track the performance of leading indices, such as the S&P 500, by owning all the stocks within it. Others track the performance of a particular sector or industry by owning blockchain stocks in companies who take part in that industry.

All of which leads us onto blockchain ETFs. The companies these ETFs hold are all involved in the industry in some way. They might build apps or other software on blockchain technology, they could be involved in cryptocurrency, or they might simply own cryptocurrencies themselves. That beind said, you may also be interested in cryptocurrency ETFs to technology ETFs.

Are blockchain ETFs a good investment?

ETFs in general are ideal investments for beginners. They’re easy to use and the fact they own a range of assets makes them safer than owning stock in a single company. However, blockchain and cryptocurrency are industries that are new, notoriously volatile, and difficult to predict.

That means that the price of these ETFs are likely to fluctuate much more than you would normally expect from this type of fund. It doesn’t make them a bad investment, but it’s a fast-moving industry where government regulation could play a role in the future. While you can ‘set and forget’ your money in most ETFs, in this case you should be prepared to watch it more closely.

Use the latest blockchain news links in the table below to keep tabs on any developments that might affect the value of your investment. If you’re ready to go ahead and get one of the ETFs on this page, then you just need to find a broker to get started.