Cooler Heads Will Prevail
The Fund declined 11.64% in March and 14.24% in Q1 (NAV return, see standardized performance). The extreme reversal of negative sentiment came suddenly due to tariff fears and the risk of a recession. However, those selling out of short-term fear may be missing the point, and ultimately President Trump may prove more pragmatic than people think. Most everyone would agree that America’s problems are real, and kicking the can down the road must stop at some point. This is clearly going to be a volatile period, but we believe cooler heads will prevail. With proper checks and balances across the globe, we remain optimistic that negotiations and compromises are in everyone’s long-term best interest.
The performance data quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. For most recent month-end performance, visit BLOKETF.com.
Generational Wealth: Opportunity to Align with the Industrial Revolution
The Amplify Transformational Data Sharing ETF (BLOK) mandate is to provide a picks and axes strategy that seeks to capitalize on the innovation and disruption across the infrastructure buildout associated with Blockchain technology. Despite the recent price action in the quarter, investors should feel confident that the adoption of this technology is accelerating, led by new policies that are aligned with multiple important long-term themes. Evidence of this can be seen in legislative actions, executive orders, and the tone around regulatory shifts.
Executive Actions and Strategic Initiatives
January 23, 2025, President Trump signed Executive Order 14178, titled "Strengthening American Leadership in Digital Financial Technology”. This order revoked prior directives from the previous administration and established a working group tasked with proposing a comprehensive federal regulatory framework for digital assets within 180 days (July 22, 2025).
Following up on the earlier executive order, President Trump signed another directive on March 6, 2025, to create the Strategic Bitcoin Reserve and the U.S. Digital Asset Stockpile. This initiative aimed to manage and capitalize on digital assets seized by the government, positioning Bitcoin as a strategic reserve asset. The move underscored the administration's commitment to integrating cryptocurrencies into the national economic strategy. The Bitcoin Policy Institute quickly and boldly followed suit with a proposal on how issuing $2 trillion of Bit bonds as 10-year treasury bonds with a 10% allocation to Bitcoin could help address the challenge of rolling the $9.3 trillion of treasuries that are maturing in 2025. The institute writes that such a proposal “over a ten-year period, could represent nominal savings of $700 billion and a present value of $554.4 billion. After accounting for the initial bitcoin purchase of $200 billion, the program delivers net taxpayer savings of $354.4 billion even if bitcoin prices remain static”.1
Legislative Developments
In February 2025, the Senate Banking Committee approved the "Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025" (GENIUS) Act. Concurrently, the House Financial Services Committee deliberated on the “Stablecoin Transparency and Accountability for a Better Ledger Economy” (STABLE) Act. This bill proposed stringent standards for stablecoin issuers, akin to those applied to federally regulated financial institutions. The committee's open discussions reflected bipartisan efforts to address the regulatory challenges posed by the rapid proliferation of stablecoins. These two bills advance the discussion around a framework for policy that has been absent for too long.1
Regulatory Agency Actions
Under the new administration, the SEC reversed previous guidance that had hindered banks from holding digital assets. This policy shift allowed financial institutions to expand their cryptocurrency services, marking a significant departure from the prior administration’s more restrictive stance. The reversal aimed to foster innovation and integration of digital assets within traditional banking frameworks.
In alignment with the executive orders, the SEC established a Crypto Task Force led by Commissioner Hester Peirce. The task force was charged with developing a regulatory pathway that balances legal compliance with the promotion of innovation in the cryptocurrency sector. This initiative signified a move towards more structured and supportive regulatory oversight.
Key Themes: Digital Gold, Automation, Payments and DABT
There is a great deal that is unknown today due to the proposed tariffs, but policy tailwinds around cryptocurrency and alignment of interests around these four themes will provide the Fund with the opportunity to capitalize on these themes.
- Bitcoin as the largest Blockchain by market value continued to show adoption, as modern digital gold. This does not mean that it will always go up and/or not be volatile. This narrative only speaks of the fact that Bitcoin’s value proposition is digital in nature and that its value properties align with the factors that have made gold work as an investment historically. However, a key difference is that as a hard asset and blockchain, its limited supply and usefulness can be securely transferred almost instantly and stored cheaper. Those who question the value of Bitcoin but appreciate the value of gold are just relying on past trends while ignoring the risk that in a modern world, younger investors may simply choose the modern technology solution. Afterall, a gold bar weighs more than an iPhone! As of March 31, 2025, indirect exposure to Bitcoin was about 16-17%.
- Automation through Blockchain, whether it is decentralized or centralized, is becoming ubiquitous. In last month’s report, titled Big Firms Getting Louder, we highlighted Mastercard’s use of tracking 30% of its $28 billion transaction volume on chain. We believe the adoption of Blockchain that transfers trillions of dollars of value across private or public networks will become as normal as email in the future because of the benefits of permanent record keeping, reduced frictional costs, and speed. As of March 31, this theme can be isolated in the categories we reference as Transactional (27.42%, i.e. Platform), Application (12.49%), and Venture Capital (9.87%), or in aggregate roughly 49%.
- Real World Assets, as digital asset technology, will follow the path around the stablecoin payment technology, which proves that the transfer value can be tokenized. We see the urgency and positive steps around the President’s 180-day agenda as a positive that may drive stablecoin assets to increase from the $225 billion as of February 2025.2 Stablecoins are big buyers of U.S. treasuries. For example, Tether (USDT/$91 billion) and Circle Internet Group (USDC/$29 billion) alone currently hold about $120 billion in Treasuries.3
- Comments as clarity made by Hester Pierce, Crypto, provide confidence that the technology can work to facilitate the transfer of payments without regulation by the SEC and therefore simplify future adoption. This also creates a path to further test the feasibility around the tokenization of real world assets. Afterall, if capital and information can be easily and securely transferred with frictionless costs and security, that would suggest that other types of assets could be put on-chain.4
- Larry Fink’s comments in his 2025 shareholders letter (blackrock.com/corporate/investor-relations/larry-fink-annual-chairmans-letter) also offer an important vision of the future for stable coins and tokenization. He writes “If SWIFT is the postal service, tokenization is email itself - assets move directly and instantly, sidestepping intermediaries. What exactly is tokenization? It's turning real-world assets—stocks, bonds, real estate—into digital tokens tradable online. Each token certifies your ownership of a specific asset, much like a digital deed. Unlike traditional paper certificates, these tokens live securely on a blockchain, enabling instant buying, selling, and transferring without cumbersome paperwork or waiting periods. Every stock, every bond, every fund—every asset—can be tokenized. If they are, it will revolutionize investing. Markets wouldn't need to close. Transactions that currently take days would clear in seconds. And billions of dollars currently immobilized by settlement delays could be reinvested immediately back into the economy, generating more growth.”
- The industrialization of America will come through Data Centers, Artificial Intelligence (AI) and Bitcoin Mining Technology (aka DABT). Computer power and energy usage is the common alignment of how the technology is powered for the future transformation of data sharing. This exposure is not coincidental, but all part of the vision of the technology. While they originated with different purposes - AI for mimicking human intelligence and blockchain for ensuring decentralized trust - they are increasingly converging. This convergence presents a powerful synergy that has the potential to transform industries, democratize data, enhance security, and reshape our digital future.
Key overlaps between Blockchain and AI bring the strengths together of each of these technologies.- Data integrity and trust in AI models are fast, but not always truly trusted. Blockchain can provide a transparent and immutable trail of data collection, access, and modification. This transparency improves trust in AI training data and ensures the accountability and auditability of model outputs.
- AI research and deployment are dominated by large tech corporations due to their access to vast computational and data resources. Blockchain can disrupt this dynamic through decentralized AI platforms where models, data, and computer resources are shared in peer-to-peer networks which leads to the reconciliation and confirmation of shared data.
- Secure Data Sharing for Machine Learning. Machine learning often requires large datasets which may contain sensitive or proprietary information. Blockchain, through smart contracts and permissioned access controls, allows for secure data sharing without exposing raw data.
- Blockchain’s native token economies provide a way to incentivize data sharing, computation, and model development that aligns incentives for scale and automation. Participants can be rewarded for contributing high-quality datasets, training algorithms, or verifying model performance—creating a self-sustaining ecosystem for collaborative AI development.
BLOK was not designed to be a broad thematic strategy but because Blockchain is setting up to disrupt so many industries and technologies, it crosses a lot of disruptive or important themes. Regardless of one’s belief around Bitcoin, we see Blockchain converging across so many industries and technologies in 2025 due to these trends.
Transactions and Repositing:
Our position in direct Bitcoin increased as we trimmed back on Strategy (MSTR) when it exceeded the 5.5% threshold, but we decided to remain exposed to the Bitcoin Treasury theme by buying GameStop (GME). GameStop is a new name for BLOK. With a market value of about $10 billion and a newly minted $1.5 billion debt issuance as a Convertible Bond, the company has the capacity to be a significant owner of Bitcoin. GameStop’s appetite could include about $4.75 billion in cash on top of the recent debt issued since the company was also operating profitably in 2024. We would also note that the CEO bought $10 million additional shares recently. Stay tuned!
We have long talked about the IPO (Initial Public Offering) market opening to provide new companies for BLOK to invest in.
In March, despite the turmoil in the markets, we also bought into...
1https://cdn.prod.website-files.com/627aa615676bdd562bec97cd/67eb2820db7319595e75947c_Bitbonds.pdf
2https://finance.yahoo.com/news/figure-gains-sec-approval-first-150000059.html
3https://finance.yahoo.com/news/stablecoin-issuers-now-18th-largest-114644572.html
4https://www.coindesk.com/policy/2025/04/04/u-s-sec-staff-clarifies-that-most-crypto-stablecoins-aren-t-securities