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7 Best Blockchain Stocks to Buy in 2024
You may know blockchain as the technology behind Bitcoin and many other cryptocurrencies. However, many investors do not have in-depth knowledge of blockchain or the best ways to invest in this exciting technology trend.
Here’s a brief overview of blockchain technologyfollowed by some of our favorite blockchain stocks – and an important principle that blockchain investors should keep in mind.
Image source: Getty Images
What is blockchain?
What is blockchain?
Blockchain is a form of ledger technology (also known as distributed ledger technology) that stores records in a decentralized manner. A bank, for example, can store information (for example, payment transactions) on its internal servers, but blockchain technology allows for the creation of an immutable public ledger accessible to all users. Blockchain ledgers are a very secure means of storing data as they cannot be retroactively changed and can be used anonymously to protect user privacy.
It’s worth noting blockchain AND cryptocurrency they are two different concepts. Blockchain is the core technology that powers cryptocurrencies, but it has many other potential applications that it has nothing to do with Bitcoin (Bitcoin -2.8%) or other digital currencies.
Think of cryptocurrencies as a car and blockchain as its engine. Sure, you need an engine to power a car, but there are many other potential applications for engines. Just to name a few, blockchain has implications for:
- Digital identities
- Rewards and loyalty programs
- Copyright protection
- Digital voting
- Real estate transfers
- Medical records
- Wills
The best blockchain stocks
The best blockchain stocks to consider
Dozens of publicly traded companies now incorporate blockchain into their operations, offer blockchain-related services to customers, or play a role in cryptocurrency sector. Some focus exclusively on blockchain innovation and/or cryptocurrencies, while others use blockchain-related products and services to complement an existing successful business.
With that in mind, here is a list of nine excellent blockchain companies to consider if you want exposure to this exciting technology in your stock portfolio.
1.Nvidia
Nvidia (NVDA -0.09%) is the leading manufacturer of graphics processing units (GPUs), which are essential components in important technology areas such as artificial intelligenceautonomous vehicles and games.
Additionally, GPUs are key hardware components of cryptocurrency mining. Simply put, “miners” use specialized GPUs to process transactions on the blockchain and are rewarded with freshly minted digital coins. Although sales of Nvidia’s cryptocurrency-targeted CMP chips have cooled as cryptocurrency prices have fallen, sales could rebound if the cryptocurrency market recovers. And even if that’s not the case, the rest of Nvidia’s business is an absolute market leader.
2. Block
Financial Technology (fintech) agency To block (m2 -1.96%), formerly known as Square, has two main components to its business: its payment processing ecosystem for small businesses and its Personal Cash App financial platform. The company also operates in business lending, a stock trading platform and buy-now-pay-later financing. The company also operates the Square Online Store platform, which helps merchants develop e-commerce and omnichannel capabilities.
E-commerce
E-commerce is the buying and selling of goods online and the related activities that facilitate it
Block is a blockchain security in two main ways. Of course, Cash App allows users to buy and sell Bitcoin quickly and easily. With the company recording more than $10 billion in Bitcoin purchases in 2021 alone, this is a significant part of the company’s business. Additionally, Block has its own team of Bitcoin developers, known as Spiral (formerly Square Crypto), which has several interesting projects, as well as an open developer platform for blockchain applications known as TBD. The company’s new name is indicative of its shift in focus towards blockchain technology solutions.
3.IBM
While IBM‘S (IBM 1.08%) performance in recent years has not been great, the company has recently made some big steps to jumpstart growth. For example, the acquisition of open source software developer Red Hat gave it numerous cross-selling opportunities with its enterprise customers.
When it comes to blockchain, IBM Blockchain has already delivered transformative solutions for clients such as Home depot (HD -1.23%), Renault (RNSDF 7.68%), Albertsons (ACI -1.04%) and many others. It could have a major growth runway if blockchain-based solutions gain more traction in the future. For example, IBM Blockchain is focusing on helping clients build more reliable and efficient supply chains
4. Mastercard
Payment processing giant MasterCard (BUT 0.25%) has grown enormously for several years as the trend towards a cashless economy has led to an increase in debit volumes and credit card transactions. Blockchain technology has the potential to transform the cashless payments space, particularly when it comes to cross-border money transfers, which have historically been slow and expensive.
Mastercard has announced partnerships with blockchain technology companies and formed a Crypto Card Partner Program, joining several leading Asia-Pacific cryptocurrency companies to launch cryptocurrency-backed Mastercard payment cards. Mastercard recently helped launch the first cryptocurrency-backed payment card in partnership with lender Nexo.
5. Amazon
In addition to operating the largest e-commerce platform in the world, Amazon (AMZN -0.38%) also operates the main cloud infrastructure service, Amazon Web Services. The AWS platform offers Amazon Managed Blockchain, which allows customers to build and manage their own blockchain networks.
There is also clear potential for Amazon to incorporate blockchain technology into its massive e-commerce business. Blockchain currently accounts for a tiny percentage of Amazon’s revenue, but as the technology evolves, there are possibilities for much more.
6. Coinbase Stocks
Coinbase (CURRENCY -5.03%) is the largest in the world cryptocurrency exchange, with more than 100 different digital assets available for trading on its platform. The company has approximately 98 million verified users in more than 100 countries around the world, and there are more than $1.2 trillion in the annualized cryptocurrency trading volume flowing through the platform. Approximately $256 billion in cryptocurrency assets are stored on Coinbase’s platform.
Coinbase’s business has taken a hit as cryptocurrency prices have fallen recently, but it could also be one of the biggest beneficiaries if assets recover. One of the best things about Coinbase – at least from a blockchain investor’s perspective – is that regardless of which cryptocurrencies end up leading the way, the company should be a big beneficiary as the technology grows.
7. GlobalX blockchain ETF
Perhaps the best way to invest in blockchain technology is not through a single stock but through a exchange-traded fund (ETF). THE GlobalX blockchain ETF (NASDAQMKT:BKCH) was formed in mid-2021 and is designed to allow investors to gain exposure to an entire basket of blockchain stocks with a single investment.
The GlobalX Blockchain ETF has a expense ratio (annual investment fee) equal to 0.50% of assets, a reasonable figure for a targeted fund. It invests in 25 different companies, including some discussed above (Coinbase is the fund’s primary holding), as well as some that are not directly listed on U.S. stock exchanges. In short, if you believe in the long-term potential of blockchain technology but don’t want to try to pick winners in the space, this ETF could be for you.
Investment related topics
An important aspect
Note that all seven of these stocks are established companies or leaders in their respective industries.
Although blockchain technology has been around for about a decade, it is still in the early stages of its real-world implementation. Blockchain could certainly become a major part of finance, technology and many other industries in the coming years, or it could take much longer. For this reason, it’s a smart idea to focus on companies that will definitely benefit from the growth of blockchain technology, but will be fine even if their blockchain ambitions don’t come to fruition.
Blockchain FAQ
Blockchain FAQ
Is cryptocurrency a good investment?
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Cryptocurrency is a good investment if you want to gain direct exposure to the demand for digital currency and the projects or businesses they facilitate. Several publicly traded companies may provide limited exposure to the cryptocurrency market, but such investments will not have the same focus on a cryptocurrency or blockchain project as investing directly in a crypto asset.
Are blockchain stocks cyclical?
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As goods with limited supplies, Cryptocurrencies go through cycles since price fluctuations arise from the fluctuation of supply and demand. Businesses using blockchain technology and cryptocurrencies can also be cyclical; however, because revenue-generating organizations are not the same as a raw asset like currency, they have different cycles than cryptocurrencies resources like bitcoin.
What is Ethereum?
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Ethereum is the decentralized, open-source technology that powers much of the cryptocurrency world. Applications range from decentralized finance to non-fungible tokens (NFT) on which enterprise blockchain solutions are based Ethereum blockchain technology. The native token of Ethereum, Ether (CRYPTO:ETH), is the second largest coin after Bitcoin (CRYPTO:BTC) based on the size and value of the market.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Matt Frankel has positions in Amazon and Block. The Motley Fool has positions and recommends Amazon, Bitcoin, Block, Coinbase Global, Home Depot, Mastercard, and Nvidia. The Motley Fool recommends International Business Machines and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.