Investing in Cryptocurrency: How to Make Money on Blockchain ETF

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If the investor is not ready for highvolatility in the cryptocurrency market, then he can pay attention to a financial instrument that is directly related to the crypto industry: blockchain ETF.

What is a blockchain ETF

The ETF itself is a fund whose shares/sharesare traded on the stock exchange. Blockchain ETF is a particular example of such a fund, the managers of which invest shareholders’ funds in companies that are in one way or another related to the use and/or development of blockchain technologies.

Blockchain ETFs should be distinguished from Bitcoin ETFsor crypto ETF. The last two are more focused on following the price of BTC or any other cryptocurrency. Blockchain ETF gives the shareholder the opportunity to invest immediately in a wide range of organizations:

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1. Companies that directly invest in the crypto industry. Among the most famous are Elon Musk's Tesla and Michael Saylor's Microstrategy.
2. Mining enterprises such as Riot Platforms, Argo Blockchain, Hut 8 Mining Corporation, Marathon Digital Holdings and others.
3. Crypto exchanges. The most striking example is the American Coinbase, which has been trading its shares on the stock market for a long time.
4. Financial organizations.This includes both investment companies and banks. This includes, for example, the largest investor on the planet BlackRock, as well as a number of large banks Wells Fargo, BNP Paribas, Citigroup.
5. Technology companies.This category may include business representatives who are not directly involved with cryptocurrency, but whose developments are actively used in blockchain projects. For example, chip developers like Nvidia and AMD.

Why you should invest in blockchain ETF

Investments in anything are intended for one thing - making a profit. However, cryptocurrencies themselves are an extremely volatile instrument. You can make money quickly and lose it quickly.

Buy shares of an individual company alsoquite risky. It is difficult to say for sure whether the price of specific shares will increase. And anyone can go broke. A striking example is the recent collapse of the Silvergate bank, a considerable number of shares of which were in the hands of the aforementioned BlackRock. Although such a large investment company probably employs serious analysts.

And blockchain ETF is such a diversified basket. Such funds typically invest in many companies at the same time. Therefore, by purchasing ETF shares, you simply minimize risks.

Let's look at a few examples of large blockchain ETFs.

Fidelity Crypto Industry and Digital Payments ETF

The fund is owned by financial company FidelityInvestments or simply&nbsp;Fidelity. This is a fairly young ETF, which was formed in April 2022. It invests primarily in financial services and technology companies. Investments can be made in both American and foreign securities. The fund is focused on the Fidelity Crypto Industry and Digital Payment Index, which reflects what is happening with cryptocurrencies, blockchain companies and organizations providing services in the field of digital payments.

The fund is traded on the NASDAQ exchange under the ticker symbolF.D.I.G. The number of shares/units outstanding is 1.7 million. The price of one security of the Fidelity Crypto Industry and Digital Payments ETF at the time of writing, on Wednesday, March 29, was $14.25.

Source:&nbsp;tradingview.com

The main share of the fund's investments is occupied byCoinbase - 13.97%, Block Ink - 10.75% and Marathon Digital Holdings Ink. – 10.55%. As you can see, all these companies are in one way or another connected with cryptocurrencies.

FDIG has a fairly small commission - 0.39%. The fund's assets exceed $20 million.

VanEck Digital Transformation ETF

The fund follows the MVIS Global Digital IndexAssets Equity Index, which in turn is focused on companies involved in digital assets. The fund was formed in 2021. Like Fidelity's fund, this ETF also invests primarily in two sectors: financial services (almost 59%) and technology companies (just over 41%).

Largest share of VanEck Digital portfolioTransformation ETF consists of shares of Riot Platforms – 7.96%, Coinbase – 7.7% and MicroStrategy – 6.9%. More than a third of the fund's investments are securities of non-US companies.

Shares of this ETF trade on NASDAQ under the ticker symbol DAAP. There are a total of 6.5 million shares in circulation. The price of one DAAP paper on March 29, 2023 was $4.08.

Source:&nbsp;tradingview.com

The commission here is slightly higher than in FDIG and is 0.5%. The number of&nbsp;assets&nbsp;exceeds $25 million.

Amplify Transformational Data Sharing ETF

It is the oldest blockchain ETF traded onexchanges. His investments are entirely focused on companies related to blockchain development. Moreover, they belong to different sectors of the economy. The ETF makes the largest investments in IT companies (31%), as well as in the capital market (21%). The majority of organizations are North American – 77%. European business accounts for only 2%.

The largest share in the fund's investmentsoccupied by Riot Platforms – 5.6%, Coinbase – 5.32 and MicroStrategy – 5.24%. In total, the Amplify Transformational Data Sharing ETF portfolio contains more than 35 different securities.

The fund's shares are traded on the NYSE Arca platform under the ticker symbol BLOK. The total number of free floats reaches 23.15 million. As of March 29, one fund security costs $17.97.

Source:&nbsp;tradingview.com

Fund commission = 0.75%. Total assets exceed $410 million.

iShares Blockchain and Tech ETFs

This fund tracks the performance of an index,which reflects the activities of US and foreign companies involved in the development, innovation and use of blockchain and crypto technologies. ETF is quite young. He was born only in April 2022.

The fund's portfolio really represents everythingeconomic sectors related to blockchain. There is also AMD - 4.58%, and NVIDIA - 4.27%. And the largest part of the capital, predictably, is invested in Riot Platforms - 15.56%, Coinbase - 12.02% and Block - 8.58%.

iShares Blockchain and Tech ETF trades onplatform NYSE Arca under the ticker IBLC. There are quite a few shares of the fund in free circulation - 400&nbsp;000. The current price of one security is $14.93.

Source:&nbsp;tradingview.com

IBLC's commission is relatively small - 0.47%. The fund's total assets are just under $6 million.

Let's summarize:&nbsp;blockchain ETF isa diversified basket, which consists of companies directly or indirectly involved in the promotion of blockchain technologies. There are quite a lot of such funds on the American market. They differ in portfolio composition, number of assets and fees charged.

This material and the information contained herein do not constitute individual or other investment advice. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.