Blockchain Technology 2026
As of October 31st, BLOK is up 60.36% year-to-date (YTD) and 3.12% for the month of October (NAV returns, view standardized performance), but November has proven to be a volatile period. Nevertheless, we expect the trend towards Blockchain technology adoption to continue to accelerate in 2026 and remain vigilant in managing risk through diversification. Furthermore, we have been constructive in adding to certain positions that have traded lower in this pullback. Our almost 8 years of experience as portfolio managers in this space has taught us many lessons about remaining focused on a balanced approach that is evidence-based.
2026 Blockchain Outlook & Themes
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The opportunity for investing in Blockchain technology stocks in 2026 is ripe for excitement and transformation. Billions of dollars have flowed into the sector, capitalizing hundreds of companies—sometimes indiscriminately—which has created a bit of a mess. However, this is where experience and active management can help generate alpha!8 We also continue to believe that the capital market will be robust in 2026 both through traditional IPOs and non-traditional company structures (SPACs, DATS etc). We believe that many companies that have public access to capital will pursue acquisitions. As the market for Decentralized Finance (DeFi) by the nature of its structure can be very fragmented. there will be a number of companies that scale through consolidation. In November, capital access despite the pullback remains over-subscribed so liquidity has remained robust. |
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Key catalyst include the passage of the Clarity Act within the next 90-120 days which will lead to a more regulated framework for financial services companies to embrace the potential benefits of Blockchain technology. In 2026, the potential benefits of transparency, lower cost, trusted record keeping and processing speed that cryptology brings to various industries will become a necessary competitive advantage similar to artificial intelligence. We envision Blockchain and AI becoming a natural evolution for changes formed by synergies in automation. Leading by example, we see the financial services industry leading the change and as Blockchain technology trust is earned with clear benefits around the transferring and hosting of money this technology will become ubiquitous across industries. Because companies involved in the payment industry will lead with similar benefits of transparency, liquidity, record keeping and lower costs consumers will end up finding confidence in branding and or price in the form of yield or rewards. Ultimately, competition that lowers frictional costs and is more secure should be good for the consumer and provide greater value. |
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.
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Tether, with an estimated $45 to $100 million in profit per employee, may be the world’s most profitable company on a per-employee basis. However, how it utilizes this profitability and wealth will be something to watch closely.
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The tokenization of the Real Estate industry as a Total Addressable Market (TAM) is a multi-trillion global opportunity ripe for disruption. The tokenization of real estate will hit everyone where they live and work! With a massive need for liquidity on top of leverage it aligns well with the potential benefits of crypto. Wrapped as a digital asset we believe, like money, will evolve as a democratized benefit and opportunity for everyone. Real Estate works on-chain because of its need for leverage, the alignment of cash flows and most importantly because data records can track ownership and bring about transparency with fractionalized benefits. Commercial properties such as a 90-story office building in New York, a shopping mall in Texas or a shipping port in Asia will be tokenized in the not so distant future. The features that blockchain bring from automation, immutability and transparency work well in the real estate market whether they are centralized or decentralized. As the stablecoin rails integrate and proliferate we can see the adoption by real estate entrepreneurs seeking to align capital as smart contracts integrated with automated payments. |
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The adoption of blockchain technology progress in 2026 will be very different than what was pursued in the earlier period back in 2021. The urgency with which mega companies are budgeting and spending on this innovation is unprecedented. Stepping back, despite the sell-off in November, the headlines from the Magnificent 7 (Mag7)9 continue to provide evidence that trillions will flow to this buildout. As capital spending on data centers and AI is accelerating in 2026, we expect to see some of the early benefits that this automation brings to the world to be evident. Blockchain, as smart contracts, integrates with AI and confirms truth through reliable and immutable record keeping. With capital spending related to data centers infrastructure stocks forecasted to reach multi-trillion levels through 2030 the headlines and industry importance will remain top of minds. These projects require long lead time and their capacity to meet demand for AI and blockchain remains critical. On a negative side, be prepared, higher electric bills will follow for many. The U.S. Energy Information Administration forecasts wholesale power prices to rise 8.5% to $51/megawatt-hour in 2026, up from $47/MWh this year, which was 23% higher than in 2024. And overall sales of electricity will likely increase by an additional 2.6% next year after rising 2.4% in 2025.6 |
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Bitcoin is not in a bear market, yet. Pullbacks in a bull market trend will continue as long as governments like Japan and the US continue to spend excessively. This does not mean that Bitcoiners who HODL (Hold on For Dear Life) get a free lunch on inflation, currency hedges and or risk. Volatility is a natural characteristic of Bitcoin, and leverage in the ecosystem should remain a concern. We would not be surprised to see a treasury company, not Strategy, to be a forced seller due to excess leverage. However, it may be simply easier to merge with an unleveraged treasury company rather than sell core HODL. Companies with a business model defined by revenues directly associated with blockchain have the potential to outperform the group which also includes hundreds of treasury companies (Direct Category). Digital Asset Treasury strategies (DATS), as companies, will consolidate and continue to accumulate digital assets, but only those with defined businesses that contribute to the network and or ecosystem will trade at a meaningful premium to their net asset value so they can continue to be “DAT Consolidators”. |
Transactions and Repositing
Pursuant to process Cipher Mining (CIFR) was trimmed multiple times as it reached contiguous new highs on sequential multi-billion additional Data Center awards from Google. Trimming into strength is part of our established process, but we were also caught off guard, like many, by the surprise restructuring announcement by Fiserve (FISV). The stock which was a small position for BLOK was down 50% during the week. In circumstances where disruption is going against a company we would rather step aside. We had known that the payment industry would be under stress in the future, but we had anticipated that we had more time and such risks were well priced in this stock.
Capital was allocated to Bed Bath and Beyond (BBBY), formerly Beyond, which reported a solid turn around in its core business. Separately, it was also announced by tZERO, that it plans to go public in 2025. tZERO is a platform leader in the business of tokenizing Real World Assets (RWA). The portfolio also added exposure to platform companies that compete against Coinbase and Robinhood: ETORO and WeBull. Lastly, it is worth highlight that we added to Sharplink (SBET) which provides exposure to the portfolio as a DATS to Ethereum.
1https://www.regular.eu/en/blog/rendement-stablecoin