The blockchain industry, often synonymous with extreme volatility and speculative excess, appears to be stabilizing. Sort of like Bitcoin (BTCUSD) is.
After a prolonged period of downward pressure, the Global X Blockchain ETF (BKCH) and its underlying stocks are showing signs of bottoming. This ETF is highly correlated to Bitcoin, which has surpassed the $80,000 mark, providing a necessary catalyst for the equities that power the digital asset infrastructure.
I’ve long maintained that longer term, I am less confident in the cryptocurrencies as an investment than I am in the viability and growth of the blockchain. The “coins” are more like commodities, but the stocks in BKCH are living, breathing companies.
For much of the past two years, blockchain equities were treated as high-beta tech plays that were the first to be sold during macroeconomic uncertainty. However, recent price action suggests a decoupling from broader tech weakness. While traditional industries have struggled with rising energy costs and geopolitical tensions in the Middle East, digital asset stocks have attracted inflows.
In part because as opposed to some industries, they are not considered to be politically controversial. BKCH is heavily weighted toward digital asset miners like Applied Digital (APLD), which has pivoted to primarily focus on AI data centers, and crypto exchange giants like Coinbase (COIN).
The price-earnings ratios for the industry have compressed significantly from their peaks of the last couple of years. Investors are now looking at companies with actual earnings power.
Despite the recovery, risks remain centered on hardware margins.
Oversupply in the mining rig market and fluctuating electricity costs continue to challenge the bottom lines of pure-play miners. Furthermore, while regulatory clarity improved throughout 2025, the industry remains sensitive to any shifts in U.S. policy that impact these businesses.
BKCH is a modestly sized ETF at under $400 million in assets. One look at the beta of 3.5 and you know you’re talking about a historically volatile ETF. But that figure has been much milder this year, which is a great sign.
One of the things I like about BKCH, and other thematic or industry ETFs in general, is its high level of concentration. Just 10 of its 37 holdings make up more than 70% of this fund.
What Does BKCH’s Chart Look Like?
Technically speaking, while I tend not to chase 10% one-day up moves, the broader trend here is now re-confirmed higher. The percentage price oscillator (PPO) indicates that BKCH has every chance to roll over, and for now, it isn’t happening. And let’s face it, this is a total momentum market.
It is always a good sign when the weekly chart looks better than the daily, since weeklies are more reliable. Seen below, I can say that about BKCH. The steady upturns in the 20-week and 50-week moving averages are very good indicators here.
ETFs this volatile are not easy to “roar.” The ROAR Score for BKCH sits at 40, which really stresses just how much my proprietary, automated chart-reading tool prioritizes risk management over momentum and chasing recent winners. Still, as the chart below shows, BKCH has transitioned nicely from the red/high risk zone to yellow/average risk.
The focus has shifted from whether these companies will survive to how they will scale in a high-asset-price environment. Tight risk management remains essential given the industry’s inherent volatility, but the immediate threat of an imminent breakdown has diminished.
Rob Isbitts created the ROAR Score, based on his 40+ years of technical analysis experience. ROAR helps DIY investors manage risk and create their own portfolios. For Rob’s written research, check out ETFYourself.com.
