Gap Wide Between Best- and Worst-Performing Blockchain ETFs

Fund holdings prove especially important within the crypto investing theme

article-image

Source: Shutterstock

share

key takeaways

  • US ETFs targeting the blockchain and crypto space have “surprisingly” little overlap when compared to other thematic categories
  • Amplify Investments’ fund proves a standout performer in trailing 12 months among competing offerings

As many investors await regulatory approval of the first ETF in the US to invest directly in bitcoin and other cryptocurrencies, the funds that indirectly provide exposure to the growing space have exhibited a wide range of returns. 

US blockchain ETFs had the highest performance dispersion of any thematic category, Athanasios Psarofagis, an ETF analyst for Bloomberg Intelligence, told Blockworks.

The data includes Amplify Investments’ Transformational Data Sharing ETF (BLOK); Siren Nasdaq NextGen Economy ETF (BLCN); the First Trust Indxx Innovative Transaction & Process ETF (LEGR); and the Capital Link Global Fintech Leaders ETF (KOIN).

BLOK, the largest and oldest ETF of the group with $1.1 billion in assets under management, has returned about 144% in the trailing year, according to FactSet data. Meanwhile, BLCN and LEGR have returned roughly 78% and 48%, respectively. The smallest of the bunch, KOIN, which has $29 million AUM, has also returned about 48% over the past 12 months.  

Gap Wide Between Best- and Worst-Performing Blockchain ETFs
The blockchain ETFs trading in the US have had higher performance dispersion in the trailing year than any other thematic fund category, according to Bloomberg Intelligence. Source: Bloomberg

“It really comes down to the difference in holdings, and surprisingly these blockchain ETFs have very little overlap among each other — only 25% to 30% on average — which has led to wider dispersion,” Psarofagis said. “Other categories with smaller dispersion tend to see more overlap and higher correlation among names.”

The theme with the lowest difference in returns was cybersecurity, he added.

BLOK’s top holdings include companies like MicroStrategy, which has become a bitcoin proxy, as well as Argo Blockchain and Voyager Digital, noted Sumit Roy, an analyst and senior staff writer at ETF.com. 

MicroStrategy recently completed a debt offering and said it intended to use net proceeds from the sale of the notes to acquire additional bitcoin. CEO Michael Saylor, the company’s CEO, said during an interview with CNBC on Tuesday that each cryptocurrencies serve a different purpose, adding that “there’s a place for everybody.”

“Many of these companies operate exclusively in the blockchain space,” Roy said of BLOK’s main holdings, “though there are some exceptions like PayPal and Square, which have big non-blockchain businesses as well.”

But LEGR’s top holdings are companies like Nvidia, Oracle, Fujitsu and IBM, which Roy said are huge conglomerates in which blockchain is a small part of the businesses. 

BLCN, which also has top positions in those four companies, currently has Overstock.com as its top holding at 2%, ETF.com indicates. Unlike LEGR and KOIN, the fund invests in MicroStrategy, allocating 1.5%.

“BLOK is going to provide the most direct exposure to the space, followed by BLCN and then LEGR,” Roy told Blockworks.

Bitwise’s Crypto Industry Innovators ETF (BITQ), which launched in mid-May, was excluded from Bloomberg’s latest performance dispersion analysis due to its limited time on the market. It has returned 4.4% in the trailing month, as of June 14, ETF.com indicates. The fund was the first greenlit by the SEC to include “crypto” in its name, and its two top holdings are MicroStrategy and Riot Blockchain, each accounting for about 10%. 

Bitwise CIO Matt Hougon said that the portfolio is based on “building roads, bridges and infrastructure that allows the crypto economy to thrive.”

Invesco is the latest manager looking to throw its hat in the ETF ring. The $1.5 trillion asset manager filed with the SEC last week to launch the Galaxy Crypto Economy ETF and the Galaxy Blockchain Economy ETF. The funds are set to track indices that comprise stocks of digital asset companies, cryptocurrency futures, and exchange-traded products and private investment trusts traded over-the-counter that are linked to cryptocurrencies.

Industry watchers have said that launching these types of funds is a way for asset managers to offer investors exposure to the space while the SEC considers about a dozen bitcoin ETFs in registration.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates.png

Research

An overview of the Base Ecosystem, with a focus on market leaders.

article-image

Although bitcoin hitting $120k by year’s end is looking unlikely

article-image

About 270 million HYPE has been claimed, valued around $7.6 billion

article-image

Stanford professors David Mazières and Dan Boneh will lead the lab alongside a cohort of graduate student researchers

article-image

With more companies holding BTC, bitcoin yielding strategies could become “a new corporate finance norm,” CoinShares posed

article-image

The proposal comes after Polygon governance considered a controversial use of bridged liquidity for yield

article-image

Can the community balance its decentralized ethos with the need for inclusivity and constructive debate?