News
Top 3 Blockchain Stocks to Buy in July 2024
Blockchain technology remains one of those profound innovations that can be difficult to understand. In fact, blockchain technology, while profound, can be difficult to understand, at least until you have a chance to see it in practice in various applications. In a way, it’s like the metaverse, where you have to try it before you can fully appreciate the technology under the hood.
Cryptocurrencies are a major innovation enabled by blockchain technology. However, it is not the only one. And while several cryptocurrencies are new investments or speculations, I would argue that the most far-reaching blockchain innovations may be many years away.
Unless you own Bitcoin (BTC-USD exchange rate) or non-fungible tokens (NFTs), you are probably unaware of the full capabilities of blockchain technology. The basic takeaway is that blockchain technology enables decentralization and next-level security.
For now, blockchain is synonymous with cryptocurrency. But in the future, it could grow into a broader and more impactful topic. Here are three of my favorite blockchain titles to play.
Coinbase (COIN)
Source: Sergei Elagin / Shutterstock.com
Coinbase Global (NASDAQ:CURRENCY) could be a major cryptocurrency in the public markets for many investors looking for a convenient proxy to play some sort of Bitcoin rebound. It’s much more than just an exchange, though. Coinbase stands out as an innovator that’s keeping blockchain technology moving.
Cathie Wood of ARK Invest, a major backer and shareholder of the company through its ARK ETFs, sees Coinbase as a major contender in digital walletsa market where a “winner takes more” scenario plays out.
Indeed, there are a lot of digital wallets out there. However, what sets Coinbase apart from the pack is its expertise in blockchain. If blockchain technology holds the keys to the ultimate digital wallet with the best security and seamless peer-to-peer transactions, Coinbase stands out as a horse worth betting on.
After a 188% surge over the past year, COIN stock is red hot and starting to get expensive, with a price-to-earnings (P/E) ratio of 44.11. Given the blockchain technology you’re exposed to, it may be worth challenging the momentum and high price of this blockchain stock, especially if you believe in cryptocurrencies and the technology that powers them.
International Trading Machines (IBM)
Source: JHVEPhoto / Shutterstock.com
For a relatively mature company, International Business Machines (London share:IBM) actually has its hand in many high-tech pies. From artificial intelligence (Artificial intelligence) and from quantum computing to blockchain, IBM is innovating in some of the most exciting areas of the emerging technology universe. However, the stock isn’t trading like it’s on the cutting edge of technology, with IBM shares trading at a trailing P/E of 17.7.
Perhaps IBM’s reputation as a latecomer over the past decade is a contributing factor to the stock’s seemingly discounted multiple. Beyond AI, IBM is exploring the potential behind blockchain technologies with several projects that could help put the technology to use in the industry.
With interesting projects looking to unleash the power of blockchain in specific sectors (think XCEED Project for the automotive industry), perhaps IBM is the blockchain stock to watch.
Block (SQ)
Source: Sergei Elagin / Shutterstock.com
Talking about digital wallets and blockchain technology, we have To block (London share:square), formerly known as Square, which is behind the digital wallet projects Cash App, Square (payments), Tidal (a music streaming service), and Bitcoin.
In fact, it’s hard to know what’s really going on with TBD, a kind of “black box” of Block. However, I do know that the company has shown that it is serious about the potential of blockchain technology. First, the company changed its name from Square to Block in 2021, and second, the company has “a stake in the future” with its share in Bitcoin.
With a forward P/E of 19.4, SQ stock looks absurdly undervalued. Until Block burns bridges on something truly unique, it will be tough for the company to regain investor attention now that it is down nearly 77% from its sizzling 2021 peak.
As of the date of publication, Joey Frenette did not hold (either directly or indirectly) any position in the securities mentioned in this article. The views expressed in this article are those of the author, subject to InvestorPlace.com policies Publishing Guidelines.
As of the date of publication, the responsible editor did not hold (either directly or indirectly) any position in the securities mentioned in this article.
Joey Frenette is an experienced investment writer specializing in technology and consumer stocks. A contributor to Motley Fool Canada, TipRanks, and Barchart, Joey excels at identifying mispriced stocks with long-term growth potential in a rapidly changing market.