Blockchain ETFs offer indirect exposure to the macroeconomic impacts of blockchain technology, also known as distributed ledger technology, or DLT. These ETFs invest in the stocks of public companies that develop or use blockchain technology.
Each ETF has its own strategy for deciding which stocks to own. Some ETFs invest only in the stocks of companies that are developing DLT. Others invest in companies that are using DLT to support and grow their businesses. Still others invest in both types of companies. In most cases, the stocks owned by these ETFs represent companies for which DLT might represent only a small part of their business.
Because ETFs are limited to invested in the stocks of publicly traded companies, they may miss the investment gains that these companies experience during their pre-IPO stages.