Blockchain Technology ETFs: A Smarter Way to Invest in Crypto Without Buying Bitcoin

The rise of cryptocurrencies has captivated investors worldwide, but direct investment in digital assets remains risky due to price volatility, security concerns, and regulatory uncertainty. While Bitcoin, Ethereum, and other cryptocurrencies have demonstrated significant growth, their unpredictable price swings make them a challenging investment for many. Additionally, managing crypto assets requires digital wallets, private keys, and security measures that may not be suitable for all investors.

For those looking to gain exposure to blockchain technology without the risks of holding crypto, Blockchain technology exchange-traded funds (ETFs) offer a compelling alternative. These ETFs allow investors to participate in the growth of blockchain innovation through traditional financial markets. Instead of holding digital currencies, blockchain ETFs invest in companies that develop, adopt, or benefit from blockchain technology.

This article will explore what blockchain ETFs are, why they are a viable investment option, the best blockchain ETFs available, and key considerations before investing. By the end, you’ll have a clear understanding of whether investing in blockchain ETFs aligns with your financial goals.

What are blockchain technology ETFs?

Blockchain ETFs are funds that track a diversified portfolio of companies involved in blockchain technology. Unlike cryptocurrency ETFs that invest in digital assets like Bitcoin or Ethereum, blockchain ETFs focus on firms developing, adopting, or profiting from blockchain solutions. These companies may include:

• Technology giants (e.g., IBM, Microsoft) developing enterprise blockchain solutions.
• Crypto-related businesses (e.g., Coinbase, Marathon Digital) operating in the digital asset space.
• Financial institutions (e.g., Visa, JPMorgan) integrating blockchain into payments and settlement systems.
• Mining and infrastructure companies supporting blockchain networks.

Blockchain ETF vs. crypto ETF: what is the difference?

Investors interested in blockchain and cryptocurrencies often come across two types of exchange-traded funds (ETFs): Blockchain ETFs and Crypto ETFs. While they may seem similar, they have distinct investment strategies and risk profiles.

• Blockchain ETFs: These funds invest in companies that develop, use, or benefit from blockchain technology. The holdings may include technology giants, financial institutions, blockchain infrastructure providers, and cryptocurrency-related businesses. The performance of blockchain ETFs depends on the success of these companies rather than the price of digital assets themselves.
• Crypto ETFs: These funds provide direct exposure to cryptocurrencies like Bitcoin and Ethereum. There are two main types: futures-based ETFs, which track crypto futures contracts, and spot ETFs, which directly hold cryptocurrencies. Since their value is tied to the price of digital assets, crypto ETFs are generally more volatile than blockchain ETFs.

Key differences

Blockchain ETFs are an excellent choice for investors who believe in the future of blockchain technology but want to avoid the price swings of cryptocurrencies. Crypto ETFs, on the other hand, cater to those looking for direct crypto exposure without managing private keys or getting into crypto wallet development.

Why invest in a Blockchain ETF?

As blockchain technology continues to disrupt industries from finance to supply chains, investors are increasingly looking for ways to capitalize on its growth. However, jumping directly into cryptocurrencies can be intimidating due to their high volatility, complex storage requirements, and evolving regulatory landscape. Blockchain ETFs offer a more accessible and balanced approach to participating in the blockchain revolution – without having to hold digital currencies themselves. Here’s why they stand out as a smart investment choice:

Diversification

Unlike buying a single stock or cryptocurrency, a blockchain ETF spreads your investment across a wide range of companies. This might include software developers building blockchain platforms, financial institutions integrating blockchain for faster settlements, and even mining hardware manufacturers. By holding a basket of such stocks, the ETF cushions your portfolio against the poor performance of any one company or sector within the blockchain space.

Lower risk exposure

Cryptocurrencies are highly volatile and vulnerable to theft, fraud, and technical mishaps. With a blockchain ETF, there is no need to set up crypto wallets, manage private keys, or worry about cyberattacks. Your investment is handled through regulated brokerage platforms, reducing both the technical complexity and the risk of personal asset loss.

Regulatory compliance

Blockchain ETFs trade on established stock exchanges and are subject to oversight by financial authorities like the SEC. This brings a layer of transparency and investor protection not always present in the crypto space. Investors benefit from detailed reporting, standardized disclosures, and reliable trading mechanisms, making blockchain ETFs more trustworthy for long-term financial planning.

Liquidity and accessibility

Blockchain ETFs are easy to buy and sell using traditional brokerage accounts. They can be traded throughout the day, just like stocks, offering investors a level of flexibility not typically found in the crypto world. You also avoid the burden of converting fiat currency into crypto and back, or navigating complex crypto exchange platforms or getting into crypto payment gateway development.

Professional management

One of the strongest appeals of blockchain ETFs is that they are managed by experienced financial professionals. Fund managers research and select companies that are best positioned to benefit from blockchain adoption, and they regularly rebalance the portfolio to optimize performance. This hands-off approach is ideal for investors who want to participate in blockchain growth without having to monitor markets constantly.

Broader exposure to the ecosystem

A blockchain ETF can also give you exposure to parts of the blockchain industry that go beyond cryptocurrencies. This includes supply chain tracking, decentralized identity, smart contract development platforms, tokenization projects, and enterprise-grade blockchain solutions. As blockchain applications continue to expand, these ETFs could capture value from real-world use cases that extend far beyond Bitcoin.

How a blockchain ETF works

A blockchain ETF operates like a traditional ETF, allowing investors to gain exposure to blockchain technology without directly buying cryptocurrencies. Here is a breakdown of how it works:

Fund composition

The ETF holds a portfolio of publicly traded companies that use or support blockchain technology. This could include tech giants like Microsoft (which offers blockchain solutions on Azure), financial firms like JPMorgan (which uses blockchain for settlements), and crypto-related businesses like Coinbase.

Tracking an Index

Many blockchain technology ETFs follow an index that tracks the performance of blockchain-related companies. Examples include the Indxx Blockchain Index or Reality Shares Nasdaq Blockchain Economy Index. These indices ensure that the ETF reflects the growth of blockchain innovation.

Trading on stock exchanges

Investors can buy and sell blockchain ETFs through regular brokerage accounts, just like traditional ETF blockchain. This provides liquidity and accessibility without the need for crypto wallets or security measures.

Portfolio rebalancing

The fund manager periodically adjusts the ETF’s holdings to maintain diversification and optimize performance. If new blockchain leaders emerge, the fund may add them, while underperforming companies may be removed.

Returns and risks

The ETF’s performance depends on the success of the companies it holds, broader blockchain adoption, and market trends. While it benefits from blockchain growth, it is not directly tied to the price of Bitcoin or other digital assets.

Blockchain ETFs offer a convenient and regulated way to invest in the blockchain revolution without direct exposure to cryptocurrency volatility.

The best blockchain ETFs in 2025

The table below highlights some of the best blockchain ETFs currently available:

Here’s a breakdown of all the terms in the table for better clarity:

ETFs diversity

An exchange-traded fund (ETF) is a type of investment fund that trades on stock exchanges, similar to stocks. It holds a diversified portfolio of assets, which can include stocks, bonds, commodities, or other securities. Blockchain technology ETFs specifically focus on companies involved in blockchain technology.

Amplify Transformational Data Sharing ETF (BLOK)

This ETF invests in companies that are actively developing and implementing blockchain technology. It provides broad exposure across multiple industries utilizing blockchain for data sharing, security, and transactions.

Global X Blockchain ETF (BKCH)

This fund focuses on companies closely tied to cryptocurrencies, including crypto mining firms, exchanges, and blockchain-related financial services.

Bitwise Crypto Industry Innovators ETF (BITQ)

This ETF is designed to give investors exposure to companies that are essential to the crypto industry’s infrastructure, such as mining, blockchain security, and financial services supporting digital assets.

First Trust Indxx Innovative Transaction & Process ETF (LEGR)

This ETF targets enterprises that use blockchain technology to improve business processes, such as supply chain management, payments, and data security.

Ticker symbol: Each ETF has a ticker symbol, a unique identifier used for trading on stock exchanges. For example, BLOK, BKCH, BITQ, and LEGR are ticker symbols investors use to find and trade these ETFs.

Focus area

This describes the primary investment strategy of the ETF:

• Broad blockchain exposure: Invests in a variety of companies using blockchain across different industries.
• Crypto-related stocks: Focuses on companies directly involved in cryptocurrencies, including exchanges, miners, and financial firms dealing with crypto assets.
• Crypto infrastructure: Invests in companies that support blockchain and cryptocurrency operations, such as hardware providers, software firms, and security services.
• Enterprise blockchain development and adoption: Targets companies integrating blockchain into traditional industries like banking, healthcare, and logistics.

Expense ratio

The expense ratio is the annual fee that investors pay for managing the ETF. It’s expressed as a percentage of the total assets invested.

• 0.75% (BLOK): Investors pay $7.50 annually for every $1,000 invested.
• 0.50% (BKCH): Investors pay $5.00 per $1,000 invested.
• 0.85% (BITQ): Investors pay $8.50 per $1,000 invested (higher due to its focus on crypto industry innovators).
• 0.65% (LEGR): Investors pay $6.50 per $1,000 invested.

Blockchain ETF risks

While blockchain ETFs provide a safer entry into the blockchain industry compared to direct cryptocurrency investments, they are not without risks. Investors should consider the following factors:

Market volatility

Even though blockchain ETFs are diversified, they remain exposed to the tech and crypto markets, both of which are known for price swings. A decline in crypto adoption or a bear market in technology stocks can negatively impact the ETF’s value.

Regulatory uncertainty

Blockchain-related businesses operate in a rapidly evolving regulatory environment. Governments worldwide are still shaping policies regarding blockchain and cryptocurrencies. Stricter regulations could limit blockchain adoption or negatively affect certain companies in an ETF’s portfolio.

Dependence on technology companies

Many blockchain ETFs invest heavily in major technology firms, which may also have exposure to other market risks unrelated to blockchain. If these companies face challenges in their core businesses, the ETF’s performance may suffer even if blockchain technology continues to grow, that’s why sometimes integrating blockchain in a company’s infrastructure is more reliable than using an intermediary.

Expense ratios and fees

Investors should be aware of the fund’s expense ratio, which represents the cost of managing the ETF. Higher fees can reduce overall returns over time, making it important to compare different blockchain ETFs before investing.

Indirect exposure to crypto

Unlike crypto ETFs, blockchain ETFs do not provide direct exposure to Bitcoin, Ethereum, or other digital currencies. While this reduces volatility, it also means that investors will not fully benefit from crypto price surges. Those looking for pure crypto investments may need to consider alternative options.

Investors should approach blockchain ETFs with a balanced perspective – recognizing the long-term potential while remaining cautious about short-term hype and market noise. So, it is better to turn to a blockchain consulting company for expert help. Proper due diligence, regular portfolio review, and a clear understanding of the ETF’s holdings and strategy are crucial to mitigating risk.

Conclusion: should you invest?

Blockchain ETFs offer an attractive way for investors to gain exposure to the growing blockchain industry without the complexities of buying and storing cryptocurrencies. These funds provide diversification, lower risk compared to direct crypto investments, and access to companies driving innovation in blockchain technology. By investing in blockchain ETFs, individuals can benefit from the long-term growth potential of blockchain while avoiding the volatility and security concerns of holding digital assets directly.

Whether you are a seasoned investor looking for exposure to blockchain technology or a newcomer wanting to enter the crypto space with reduced risk, blockchain ETFs can be a strategic and accessible investment option.

Before investing, always conduct thorough research, compare different ETF options using a blockchain ETF list, and consider your risk tolerance and financial goals. Blockchain technology is still evolving, and staying informed about market trends and regulatory developments will help you make the best investment decisions.

If you’re looking to explore blockchain beyond investments and are considering integrating blockchain solutions into your business, check out our blockchain development services and discover how we can help you leverage this transformative technology for your enterprise.