Three Dividend-Paying Cryptocurrency Funds to Buy

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As digital assets continue to mature in the global financial landscape, more investors are exploring income-generating opportunities within the crypto space. While cryptocurrencies themselves are often seen as volatile growth assets, a new class of investment vehicles—dividend-paying cryptocurrency funds—offers both capital appreciation and regular income. These funds primarily invest in blockchain-based companies that pay dividends or generate consistent cash flow, providing exposure to the crypto ecosystem without holding digital tokens directly.

For investors seeking yield alongside innovation, these three dividend-paying cryptocurrency funds stand out as compelling options in 2025.

Amplify Transformational Data Sharing ETF (BLOK)

One of the most established exchange-traded funds (ETFs) focused on blockchain technology is the Amplify Transformational Data Sharing ETF (NYSE: BLOK). Rather than investing directly in cryptocurrencies like Bitcoin or Ethereum, BLOK targets companies at the forefront of blockchain development and adoption.

The fund’s strategy includes holdings in firms involved in cryptocurrency mining, digital wallet services, blockchain infrastructure, and financial platforms enabling crypto transactions. Notable top holdings include Coinbase Global Inc. (NASDAQ: COIN), MicroStrategy Inc. (NASDAQ: MSTR), PayPal Holdings Inc. (NASDAQ: PYPL), and Robinhood Markets Inc. (NASDAQ: HOOD).

As of early December 2025, BLOK has delivered exceptional performance:

This momentum reflects growing institutional interest in blockchain applications and the resurgence of crypto-related equities. Despite its aggressive growth profile, BLOK also offers a modest dividend yield of 0.68%, sourced from underlying company payouts.

Experts like Mark Skousen, economist and investment advisor, have highlighted BLOK as a strategic play on long-term digital transformation. His advisory service, TNT Trader, recommended call options on BLOK that generated average returns exceeding 120% in just a few months.

👉 Discover how blockchain ETFs can boost your portfolio returns in 2025.

Invesco Alerian Galaxy Blockchain Users & Decentralized Commerce ETF (BLKC)

Another powerful entrant in the crypto-adjacent income space is the Invesco Alerian Galaxy Blockchain Users & Decentralized Commerce ETF (BLKC). This fund focuses on companies driving blockchain adoption through user engagement and decentralized commerce solutions.

BLKC tracks the Alerian Galaxy Blockchain Users and Decentralized Commerce Index, which includes firms deriving significant revenue from blockchain ecosystems—such as transaction fees, staking services, and decentralized applications (dApps). The index is rebalanced quarterly to ensure continued relevance and exposure to high-growth innovators.

Key advantages of BLKC include:

The fund includes major players such as Coinbase, Block Inc., and emerging leaders in Web3 commerce. With increasing mainstream adoption of decentralized finance (DeFi) and non-fungible tokens (NFTs), BLKC positions investors at the intersection of innovation and monetization.

Given its focus on real-world usage metrics rather than speculative price movements, BLKC appeals to value-conscious investors looking for sustainable growth and modest income generation within the digital asset economy.

VanEck Digital Assets Mining ETF (DAM)

The third fund worth considering is the VanEck Digital Assets Mining ETF (DAM), which provides targeted exposure to companies engaged in cryptocurrency mining operations. Unlike broader blockchain ETFs, DAM zeroes in on firms that validate transactions and secure networks like Bitcoin and Ethereum—activities that can generate steady cash flows when managed efficiently.

Mining companies included in DAM utilize specialized hardware and low-cost energy sources to mine digital assets. As block rewards and transaction fees are earned continuously, profitable miners often maintain strong balance sheets and may distribute excess capital via dividends or share buybacks.

Top holdings typically feature well-known names such as:

Despite cyclical volatility tied to crypto prices and energy costs, many mining firms have improved operational efficiency and hedging strategies since the 2022 market downturn. As a result, several now offer shareholder-friendly policies, contributing to DAM’s attractive distribution yield.

In periods of rising crypto valuations—such as the current rally pushing Bitcoin above $100,000—mining ETFs like DAM tend to outperform due to leveraged exposure to price gains.

👉 Learn how digital asset mining funds deliver both yield and upside potential.

Frequently Asked Questions (FAQ)

Q: Do cryptocurrency funds actually pay dividends?
A: Yes, while cryptocurrencies themselves do not pay dividends, many cryptocurrency funds invest in publicly traded companies involved in blockchain technology or mining operations—firms that may distribute profits as dividends. These distributions are passed through to ETF shareholders.

Q: Are dividend-paying crypto funds safer than buying individual cryptocurrencies?
A: They can be less volatile than direct crypto holdings because they’re based on regulated equities with financial statements and revenue models. However, they still carry market risk and are influenced by crypto price trends.

Q: How are dividends from crypto funds taxed?
A: In most jurisdictions, including the U.S., dividends from these funds are taxed like any other equity ETF—either as qualified dividends (lower rate) or ordinary income, depending on holding period and structure.

Q: Can I get exposure to Ethereum or DeFi through these funds?
A: Yes. Funds like BLKC specifically target decentralized commerce and user activity on Ethereum and other smart contract platforms, offering indirect exposure to DeFi growth without holding tokens directly.

Q: What’s the typical expense ratio for these crypto-focused ETFs?
A: Most range between 0.50% and 0.75% annually—slightly higher than traditional index funds but comparable to sector-specific or thematic ETFs.

Why Now Is the Time to Consider Crypto Income Funds

With Bitcoin surpassing $100,000 and Ethereum gaining momentum amid renewed institutional demand, the broader digital asset ecosystem is entering a new phase of maturity. Regulatory clarity, improved infrastructure, and growing adoption of blockchain across finance, supply chain, and identity verification are fueling long-term confidence.

Dividend-paying cryptocurrency funds allow investors to participate in this transformation while receiving periodic returns—a rare combination in the typically speculative world of crypto.

Moreover, integrating these funds into a diversified portfolio can enhance risk-adjusted returns. By focusing on revenue-generating businesses rather than pure speculation, investors gain access to innovation with a foundation in real economics.

👉 Start building a future-proof portfolio with next-gen digital asset strategies today.

Core Keywords

These funds represent more than just a bet on price appreciation—they reflect confidence in the ongoing evolution of decentralized technology as a driver of economic value. For forward-thinking investors in 2025, combining yield with innovation has never been more accessible.