Blockchain exchange traded funds work like just every other industry exchange traded funds. it works exclusively be trading ETFs of companies who have their business models on blockchain technology or those whose simply invest in blockchain based business models. Blockchain ETFs are a mix of double gains, pooled stocks investments and real time trading of the stocks.
The benefits of blockchains are far beyond the monetary value and thus, have made regulatory bodies to be giving green flags to some blockchain ETFs. Although, Bitcoin blockchain ETFs are still being rejected by Stock Exchange Commission. And they are just all about risk betting money on blockchain based start ups.