Summary Amplify Blockchain Technology ETF (BLOK) is a long-term Buy, offering strong diversification and consistent outperformance among crypto-themed ETFs. BLOK's portfolio balances core blockchain companies with exposure to bitcoin miners, exchanges, fintech, and AI-adjacent large caps, reducing single-stock and bitcoin price risk. Compared to peers, BLOK delivers superior risk-reward, lower volatility, and thematic diversification, making it a standout choice for crypto ecosystem exposure. I rate BLOK as overweight in a crypto portfolio, emphasizing its structural advantages, empirical performance, and potential to benefit from broader blockchain adoption. There are many alternatives when it comes to investing in the crypto ecosystem, looking beyond just bitcoins and bitcoin mining companies. I recently wrote about an AI-powered Schwab Crypto Thematic ETF (STCE), and found it a decent Buy. The Amplify Blockchain Technology ETF ( BLOK ) is another name I recommend. It has been an outperformer, remaining with the top half of the crypto pack (say STCE, DAPP, BKCH) in most market conditions and has some structural advantages (that we will discuss in this article) that make it a long term Buy. The volatility of the crypto space is huge and investors need to have high growth high risk appetite to be able to ride this ETF. Also, to cut idiosyncratic risks, I particularly emphasize a basket of ETFs each having their own strengths. So, while STCE does find a place in that portfolio for its unbiased rules-based but active-like positioning (backed by performance data), BLOK's active strategy presents a decent balance of investments beyond mining and bitcoin prices, optional plays in AI and a well-diversified portfolio (low single-stock risks). Methodology and Portfolio BLOK's investment universe starts from companies meaningfully involved in blockchain development, usage, R&D or commercialization. Managers check for blockchain relevance (including profiting from blockchain based data). The portfolio of 40-60 stocks comprises a 70% core holding in companies who derive significant revenue from blockchain. The remaining portfolio (secondary ~30%) consists of companies having partnerships and investments in the space. Stocks are weighted equally within each group, although the active methodology means deviations over time (particularly given the portfolio size and idiosyncratic volatile moves between stocks). However, individual stock risk looks relatively muted compared to STCE (top weight ~11.3%), VanEck Digital Transformation ETF (DAPP) (top weight ~8.64%) and Global X Blockchain ETF (BKCH) (~13.12%). The top 10 holdings account for a reasonable ~35% of the total portfolio — not too concentrated. For comparison here are the top 10 total weightings: for DAPP ~60%, BKCH ~71% and STCE~60%. The diversification is a real structural strength for a crypto-themed ETF and should help protect the portfolio from adverse movements in single stocks. Top 10 Holdings - BLOK (Seeking Alpha) Inferences from the Portfolio Based on a manual scan of the current holdings , I found ~22% investments in bitcoin miners and infrastructure, names like HUT 8 Corp (HUT), Cipher Mining, Inc. (CIFR) and TeraWulf, Inc. (WULF). This is the most correlated part of BLOK to crypto prices and is reasonably low exposure to that extent. Adding another ~8% exposure in bitcoin ETFs and Trusts like iShares Bitcoin Trust ETF (IBIT) or even Strategy Inc (MSTR), the total bitcoin correlated part of the portfolio adds up to only ~30%. The bulk of the portfolio benefits beyond simply bitcoin price moves, unlike a mining focused ETF like say CoinShares Bitcoin Mining ETF (WGMI). Exchanges and Brokerages account for a significant ~24% of the portfolio — companies like Robinhood Markets, Inc. (HOOD), Coinbase Global, Inc. (COIN) and CME Group, Inc. (CME). These companies generate revenues from trading and services fees. They need transaction volumes and not bitcoin price appreciation directly. They can benefit from greater bitcoin adoption and trading, so lower volatility over time in crypto prices is more important than a bull market alone (of course, a bull market helps). Then there is a ~17% exposure in payments and fintech to companies like PayPal Holdings, Inc. (PYPL), NU Holdings Ltd. (NU) and even MercadoLibre, Inc. (MELI). This layer is very diversified on its own with companies like MercadoLibre's share prices having very low dependency on bitcoin prices. Even the more dependent names like Paypal and Nu Holdings will benefit from increased crypto adoption (i.e. if bitcoin becomes a more accepted currency globally) versus sheer price appreciation. BLOK also has ~15% in enterprise blockchain and AI-adjacent large caps — NVIDIA Corporation (NVDA), Advanced Micro Devices, Inc. (AMD) and International Business Machines Corporation (IBM) are in this mix. They walk into the ETF on the basis of infrastructure support to mining and blockchain technology (from chips to cloud support). This is a very good diversification away from crypto prices and happens to have an AI optionality too in a lot of cases (like Nvidia and AMD). Performance Insights The diversification by theme and a breakaway from the crypto prices provide substantial alpha avenues for BLOK. BLOK could grow in many ways: AI compute, semis, fintech volumes, enterprise software spending or even tokenization. The bulk of BLOK doesn’t need Bitcoin prices to rise - it only needs Bitcoin to keep getting adopted. Adoption happens when volatility falls, not when prices spike alone. Even within the ~30% of the portfolio more directly linked with bitcoin prices, surprises happen. Some traditional miners are turning into AI compute and hosting, like TeraWulf and Core Scientific, Inc. (CORZ). These shares actually led to a significant surge in BLOK at a time when bitcoin prices did not rise at all. At some point in October, BLOK was up 50% while bitcoin was still flat. Data by YCharts This AI side story was of course very well captured in a bitcoin mining focused ETF like WGMI where IREN Limited (IREN) and Cipher Mining (both together account for over a third of the overall portfolio). WGMI tripled in October due to this evolving story, but has also fallen by 42% since. WGMI's volatility is actually what makes BLOK's diversification more risk aware, both in terms of single stock exposure as well as exposure to several agnostic themes. I have already charted the outperformance in BLOK versus IBIT (a proxy for bitcoin), illustrating its reward potential versus bitcoins. This comes at the cost of volatility that is lower than bitcoin's. In terms of standard deviations, BLOK shows 10% lower standard deviation than IBIT and less than half of WGMI. Both empirically, and in terms of how the portfolio is structured, expect BLOK to have a far superior risk-reward asymmetry than IBIT or WGMI like bitcoin focused bets. A comparison with other crypto-themed ETFs also show BLOK has been in the top 2 most of the time over the past 3 years (observe the trajectory and not only the end point outperformance). Here are the standard deviation numbers for the risk/volatility perspective - BLOK ~45, STCE ~63, BKCH ~77 and DAPP ~74. Overall, BLOK is consistently towards the higher end of the total return spectrum within the crypto pack, while its risks are far lower. That calls for overweighing BLOK in any crypto and blockchain portfolio. Data by YCharts Overweight BLOK I rate BLOK a Buy backed by several empirical evidences and structural advantages. First, its single stock diversification is best-in-class. Secondly, thematic diversification means lower volatility. Third, empirical performance shows these expectations actually translate to real life performance. BLOK outperforms most of the crypto pack most of the time and keeps volatility levels low. Overall, I am bullish this ETF segment, that invests on a crypto ecosystem rather than just bitcoins and mining. This positions it to gain from simply better adoption over bitcoin appreciation. With regulatory supports coming in , in the US as well as elsewhere, as bitcoin adoption grows, this theme will likely keep growing. Crypto investing cannot be defensive given its volatility, so investors should have the risk appetite to wade through 50% MTM losses at some point. A systematic accumulation over time works. At least the wider crypto plays makes for lower volatility levels - but still may require similar levels of risk appetite. The overall crypto ecosystem bet looks bullish otherwise, with BLOK a material overweight in that portfolio.
