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  1. Crypto Channel
  2. Breaking Down ‘BLOK’: Inside This ETF’s Portfolio
Crypto Channel
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Breaking Down 'BLOK': Inside This ETF's Portfolio

Karrie GordonJun 28, 2021
2021-06-28

Even as crypto markets rose and fell (and rose, and fell) in May, one actively managed crypto-adjacent ETF, the Amplify Transformational Data Sharing ETF (BLOK), managed to capitalize on the volatility to mitigate losses and obtain greater direct crypto exposure.

BLOK: Highly Correlated to Bitcoin

As of the end of May, BLOK is still up 30.99% year-to-date, even after falling 13.51% that month, according to a new monthly newsletter Amplify publishes about BLOK’s performance.

The performance dip largely occurred due to how heavily the ETF is correlated to the performance of Bitcoin.

In May, Bitcoin dropped from $56,814 to $35,218, a roughly 38% decline. BLOK doesn’t own Bitcoin directly, but because a great number of the companies carried within the ETF deal with Bitcoin through their activities or via blockchain in general, its performance aligns with the rise and fall of the value of Bitcoin.

Currently BLOK’s correlation to Bitcoin is 85.5 YTD.

BLOK Performance Figures

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Source: Amplify, Bloomberg.

BLOK Ups Exposure to Digital Platforms, Exchanges

Because BLOK is actively managed, the ETF can respond to market shifts with real-time portfolio changes. In May, with the massive volatility experienced in the crypto markets, BLOK narrowed its holdings from 51 down to 46 and shifted more weight into digital platforms and exchanges.

BLOK’s managers increased exposure to platforms such as Coinbase Global (COIN), Voyager Digital (VYGR/VYGVF), and Galaxy Digital (GLXY/BRPHF). In May, BLOK increased its weight in digital platforms and exchanges to 35.38% total in weight.

The shift helped capitalize on the high performance and revenue growth that the exchanges typically enjoy during times of extreme volatility and increased flows.

Dropped companies included Alphabet (GOOGL), JD.com (JD), Tesla (TSLA), Visa (VISA), and Nasdaq (NDAQ).

BLOK also increased its direct exposure, increasing weight in the top 20 holdings by 2%, up to 69%.

About BLOK

BLOK, which now tops $1 billion in AUM and is the largest of the blockchain ETFs, devotes 80% of its portfolio to companies that are directly involved in developing and using blockchain technology.

The remainder is invested in companies that are partnered with or directly invest in the companies utilizing and developing blockchain technologies. However, the fund does not invest directly in blockchain technology and cryptocurrencies/tokens.

BLOK spreads its holdings across the size spectrum: the fund has a market capitalization breakdown of 43.7% holdings in large cap companies, 26.7% in mid cap companies, and 29.7% in small cap companies.

BLOK has an expense ratio of 0.70%.

For more news, information, and strategy, visit the Crypto Channel.

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