Blockchain Investment: Beyond Cryptocurrencies

Investing in blockchain without buying cryptocurrencies can be done through several avenues. One way is to invest in companies that hold cryptocurrencies or provide cryptocurrency-related services. These include publicly traded businesses across sectors that have added bitcoin to their balance sheets or offer cryptocurrency storage and payment services. Another approach is to explore companies with technology related to blockchain, the foundation of cryptocurrencies. Examples include Square, PayPal, Riot Blockchain, and Galaxy Digital. Additionally, investing in underlying hardware, such as graphics processing units (GPUs), can provide exposure to blockchain without direct cryptocurrency involvement. Investing in cryptocurrency funds, such as bitcoin trusts, is another option, although fees should be considered. Finally, blockchain exchange-traded funds (ETFs) offer a way to invest in a basket of companies involved in blockchain technology, reducing risk compared to direct cryptocurrency investments.

Invest in companies that hold cryptocurrencies

Investing in companies that hold cryptocurrencies is a great way to gain exposure to the crypto market without directly purchasing digital assets. Here are some insights and examples to help you understand this strategy:

Understanding the Approach:

• This strategy involves investing in publicly traded companies that hold cryptocurrencies as part of their treasury reserves or investment portfolios. These companies may include crypto exchanges, mining firms, software providers, financial institutions, and other businesses that have adopted blockchain technology.
• By investing in these companies, you benefit from their expertise and infrastructure in the crypto space without directly purchasing cryptocurrencies.

Examples of Companies Holding Cryptocurrencies:

• MicroStrategy Incorporated: MicroStrategy is a prominent business analytics platform and one of the earliest corporate adopters of Bitcoin. As of May 2025, the company held 214,400 BTC in reserve, worth billions of dollars.
• Tesla Inc.: The electric vehicle manufacturer Tesla made waves when it invested $1.5 billion in Bitcoin. While they have sold a portion of their holdings, they continue to hold a significant amount.
• Coinbase Global, Inc.: Coinbase is a well-known cryptocurrency exchange that went public in April 2021. They offer a platform for trading various cryptocurrencies and have their own Bitcoin holdings.
• Galaxy Digital Holdings: Galaxy Digital is a crypto-focused merchant bank and one of the largest institutional holders of Bitcoin. They provide a range of crypto-related financial services.
• Marathon Digital Holdings Inc.: Marathon Digital is a Bitcoin mining company that holds a substantial amount of Bitcoin. They aim to build one of the largest mining operations in North America.
• Square Inc. (Block): Square, now known as Block, is a payments company that enabled its users to buy and hold cryptocurrencies. They have made significant investments in Bitcoin and continue to explore crypto-related initiatives.
• Hut 8 Mining Corp: Hut 8 is a Canada-based Bitcoin mining company that holds a large amount of self-mined Bitcoin. They are listed on the Nasdaq Global Select Market and are committed to increasing their Bitcoin holdings.
• Riot Blockchain, Inc.: Riot Blockchain is another US-based crypto-mining company that holds Bitcoin. They have expanded their operations and aim to be a leading player in the industry.

These examples demonstrate how investing in companies that hold cryptocurrencies can provide you with exposure to the crypto market. Remember to conduct thorough research before making any investment decisions and always consider your risk tolerance and financial goals.

Invest in companies with blockchain-related technology

Blockchain technology is being embraced by both new and established companies to improve operations and develop new products and services. This has opened up opportunities for investors to get involved in the blockchain boom without directly investing in cryptocurrencies.

Invest in companies using blockchain to enhance their operations

Many companies are integrating blockchain into their operations to improve efficiency, security, and profitability. For example, Walmart has been testing blockchain to track food distribution from its suppliers, making it easier to identify outbreaks of foodborne illness. PayPal Holdings allows most US customers to use several types of cryptocurrency for transactions.

Invest in companies offering blockchain-related products and services

Some companies are creating blockchain-related products and services for their customers. For instance, Amazon Web Services offers Amazon Managed Blockchain, which allows customers to create and manage their blockchain networks. IBM has helped over 220 businesses develop applications and data governance tools that run on blockchain.

Invest in companies developing blockchain for business

Several companies are developing blockchains for business use. For example, Chainlink is a Web3 services platform that makes it easy for developers to build their own Web3 applications. Aptos provides networking tools to enable "universal and fair access" to decentralised assets.

Invest in companies creating blockchain for in-house use

Some companies are creating blockchain solutions for in-house use. For instance, Chronicled leverages blockchain-enabled IoT devices to make the supply chain more transparent. Fortress Trust provides the blockchain support for Web3 infrastructure, opening up blockchain, NFT, and crypto benefits to innovators.

Invest in companies involved in the metaverse

The metaverse is a digital world where virtual reality, augmented reality, and the physical world meet. Blockchain will play a large part in the metaverse as it develops. Companies such as Meta (formerly Facebook), Advanced Microdevices (AMD), Nvidia, Amazon, and Epic Games have expressed interest in metaverse products and services.

Invest in companies offering blockchain-based financial services

Blockchain has the potential to transform the financial industry, particularly in areas like lending, money transfers, and banking. For example, Block (formerly Square) has two main components to its business: a payment-processing ecosystem for small businesses and its Cash App personal financial platform, which allows users to buy and sell Bitcoin. Coinbase is another example of a company offering blockchain-based financial services, operating the largest cryptocurrency exchange in the US.

Key considerations

When investing in companies with blockchain-related technology, it is important to keep the following in mind:

• Blockchain technology is still in its early days of real-world implementation, so it may be wise to focus on companies that will benefit from the growth of blockchain technology but will also be fine if their blockchain ambitions do not work out.
• Cryptocurrency prices can be highly volatile, and purchasing them may lead to financial losses. Therefore, it is crucial to consider the risks and continue learning about the space before investing directly in cryptocurrencies or blockchain tech.

Invest in blockchain-focused funds

Blockchain-focused funds, such as exchange-traded funds (ETFs), are a great way to invest in blockchain without directly buying cryptocurrencies. ETFs are baskets of securities that trade on an exchange, like a stock, and offer investors an easy way to gain exposure to a diverse set of assets.

Amplify Transformational Data Sharing ETF (BLOK)

The Amplify Transformational Data Sharing ETF is the largest blockchain ETF by net assets. It was launched in January 2018 and has a 0.76% expense ratio. The fund invests in companies that are developing or using blockchain technologies, including crypto exchanges, cryptocurrency mining companies, and developers of new blockchain applications. Notable holdings include Coinbase Global, Nvidia, and CME Group.

Siren Nasdaq NexGen Economy ETF (BLCN)

The Siren Nasdaq NexGen Economy ETF is a passively managed fund that tracks the Nasdaq Blockchain Economy Index, which includes companies that develop blockchain technology or use it for their businesses. It was also launched in January 2018 and has a 0.68% expense ratio. Top holdings include Coinbase and Nvidia.

First Trust Indxx Innovative Transaction & Process ETF (LEGR)

The First Trust Indxx Innovative Transaction & Process ETF is a diversified blockchain and crypto ETF with over 100 stocks in its portfolio. It was launched in January 2018 and has a 0.65% expense ratio. Top holdings include Oracle Corporation, AT&T Inc., NVIDIA Corp., and Taiwan Semiconductor Manufacturing Company Ltd.

Bitwise Crypto Industry Innovators ETF (BITQ)

The Bitwise Crypto Industry Innovators ETF is a newcomer to the blockchain ETF space, launched in May 2021. It is a focused portfolio of 30 stocks with an 0.85% expense ratio. The fund differs from others on this list as it tilts towards companies that own Bitcoin and other crypto pure-plays, including Marathon Digital Holdings, MicroStrategy, and Coinbase.

Global X Blockchain ETF (BKCH)

The Global X Blockchain ETF is another new blockchain ETF, launched in July 2021, with only 25 stocks and a low 0.5% expense ratio. The fund slants towards crypto mining firms, including Riot Blockchain, Marathon Digital Holdings, and Hut 8 Mining, and has generally followed the price of Bitcoin.

Other blockchain-focused funds

Other blockchain-focused funds to consider include the Blockchain Technologies ETF (TSX: HBLK, OTC Pink: BKKCF), which was the first Canadian blockchain ETF on the market, and the VanEck Digital Transformation ETF (DAPP), which offers good exposure to international stocks in the blockchain space.

Invest in blockchain-based ETFs

Blockchain ETFs are a great way to invest in blockchain without buying cryptocurrencies. These exchange-traded funds hold stocks in companies that profit from or have business operations tied to blockchain technology. Blockchain ETFs are different from cryptocurrency ETFs, which are designed to track the price performance of one or more digital tokens.

• Amplify Transformational Data Sharing ETF (BLOK): This is the largest blockchain ETF by net assets. It is an actively managed fund with total assets of over $1.1 billion as of January 2024. The fund invests in companies that are developing or using blockchain technologies, including crypto exchanges and companies with exposure to cryptocurrency mining.
• Siren Nasdaq NexGen Economy ETF (BLCN): This ETF aims to track the performance of the Nasdaq Blockchain Economy Index, which includes companies involved in the research, development, support, or utilisation of blockchain technology. It has an expense ratio of 0.68%.
• First Trust Indxx Innovative Transaction & Process ETF (LEGR): This ETF offers exposure to a global portfolio of companies with varying degrees of involvement in blockchain technology. It has an expense ratio of 0.65%.
• Bitwise Crypto Industry Innovators ETF (BITQ): This ETF holds an index of 30 crypto companies from around the globe, with many deriving more than 75% of their revenues from crypto assets. It has an expense ratio of 0.85%.
• Global X Blockchain ETF (BKCH): This ETF invests in global companies participating in blockchain activities like digital asset mining and integration. It has an expense ratio of 0.50%.

It is important to note that blockchain ETFs come with additional sources of volatility and inherent risks, such as the non-performance or failure of the blockchain ecosystem. The holdings of blockchain ETFs also often overlap with existing technology and internet companies, and the overall returns may be vulnerable to the non-performance of their majority non-blockchain segments.

Invest in companies using blockchain for non-cryptocurrency purposes

Blockchain technology is being used by companies in a variety of industries, including healthcare, real estate, lending, retail, and more. Here are some ways to invest in companies that are using blockchain for non-cryptocurrency purposes:

• Invest in companies that hold cryptocurrencies: Some companies hold cryptocurrencies or provide cryptocurrency-related services. For example, in 2021, Tesla bought $1.5 billion worth of Bitcoin and announced it would accept the currency as payment (though it later backtracked on this decision due to environmental concerns). Other companies that hold cryptocurrencies include Coinbase, a publicly traded cryptocurrency exchange.
• Look at companies with related technology: Some companies have technology related to trading coins or use blockchain technology in different parts of their business. For example, Square and PayPal allow users to trade cryptocurrency on their platforms, while Riot Blockchain and Galaxy Digital focus on cryptocurrency and blockchain technology. Big tech companies like Microsoft, IBM, Google, SAP, and Amazon also utilize blockchain in various ways.
• Invest in underlying hardware: Graphics processing units (GPUs) are needed for computers to solve the math equations required by blockchain technology. Investing in companies that produce GPUs, such as Nvidia, can provide exposure to blockchain technology.
• Invest in blockchain-focused funds: Some funds, such as the Ark Next Generation Internet exchange-traded fund, provide exposure to blockchain technology and cryptocurrencies, as well as other innovative technologies like artificial intelligence, big data, and cloud computing.
• Buy stocks of companies using blockchain: Buying stocks of companies that utilize blockchain technology can be a way to gain exposure to this emerging field. Examples of such companies include Walmart, which has been testing blockchain to track food distribution, and PayPal, which allows customers to use cryptocurrencies for transactions.

Frequently asked questions