When it comes to investing, there are a couple of different directions you might choose to go in. Namely, we might decide that we want to go down the traditional route and invest in some good old Bitcoin stocks. On the other hand, we might take a slightly different direction and look to the source. Yes, you heard us. You might also decide to invest in blockchain stocks since they might just be a little more stable in terms of pricing.
Blockchain is a heavy topic so before we have you convinced, we want to show you that investing in blockchain technology stocks doesn’t have to be difficult. Especially with this guide by your side.
Note: This article is for informational purposes only and should not be construed as investment advice.
How to Invest in Blockchain
When trying to decide how to invest in the blockchain you have a couple of different options. First, as you might have noticed, you can invest in individual blockchain stocks. This might seem a little overwhelming. So, we have put together a couple of stocks that can help get you started in your search. For those who are slightly more risk-averse, you might like the option of investing in a Blockchain ETF. ETF’s are typically a little lower in cost. They also allow you to invest in a bundle of companies rather than hand-selecting a few. This means that your fate is in the hands of a few, instead of the one.
On the contrary, if there is a project you are heavily dedicated to you might like the option of crowdfunding. This way your investments can go directly to a specific project. This can be a great way to help support an up-and-coming business while also investing in something you believe in. At first thought, no companies might come to mind. If this is the case, platforms like Angellist give you a great opportunity to browse what’s out there.
Best Blockchain Technology Stocks
There are quite a few options when it comes to how you decide to investments in blockchain. While we can’t decide what is right for you, we can provide some insights into which stocks were on our radar going into 2020. Although choosing was far from easy, we narrowed down our list to a lucky top 9. So, without further ado let the comparisons begin!
If you’ve done some research before coming to this article, this stock will likely not come as a surprise. IBM is a relatively safe pick. This can be likened to their leader status in the blockchain industry. A status that has been maintained since the beginning. IBM now has more than 500 blockchain projects that they continue to participate in. One of these includes their blockchain-as-a-service (BaaS) endeavor. BaaS continues to be delivered through the IBM Cloud. This platform continues to place IBM as a platform for the next generation of blockchain for businesses.
Don’t take these innovations as your deciding factor, just look at the historic. The stock typically fluctuates a few times throughout the year and is currently in a valley. And you know how this works, buy low sell high? As historic would suggest you will likely see an increase in the stock price. That said it is hard to make short term decisions on this stock, this one might be one you HODL (at least in the meantime).
IBM will continue to be a major player in the game as they continue to lower costs across a variety of industries. As more and more companies adopt this technology we are confident that IBM’s profits will continue to make a steady climb and you (investor) will continue to reap the benefits of a strong investment. Despite recent pessimism, the company has started hiring and continues to earn a single-digit growth rate despite fluctuations in their team.
Although the Amazon stock is already priced high, with their blockchain initiatives there is no reason we shouldn’t believe the stock won’t go any higher. Amazon has steadily inclined over the last 5 years and for good reason as they continue to push the boundaries of what is possible. Just remember how Amazon transformed the healthcare industry and how other stocks took a hit when Amazon entered the picture. We suggest this might just be the case yet again.
Similar to IBM’s contributions, Amazon’s web services continue to be used by Change Healthcare, GE Aviation, Liberty Mutual Insurance, Philips, Sony Music, Verizon and Workday. The company still has a way to grow, specifically in the blockchain industry. The stock has since dipped due to the Coronavirus outbreak, suggesting that now might just be a good time to start investing if you haven’t already.
Although there might be a dip in the market, we have to remember that this company has also been a good buy stock for the last decade. Like most cliches we would do well to remember the faster it rises, the harder it falls. With talk of a recession in 2021, we do also have to keep in mind that stocks should be purchased with the intention to hold on for the long-term. These stocks should only be included in part of a more diversified strategy.
Although Square might not come to mind as a blockchain company, you might have to do a double-take.
The company has faced expansive growth as of recently which is both a good and bad sign. In times have steep hikes, many wonder if it is only a matter of time before the prices come crashing down. However, if you are willing to hold on for the long haul, Square is still a good buy in our books and this is namely due to their growth into the blockchain realm. The CEO of Square is known for his support of Bitcoin through his initiative Square Crypto and for enabling Square users to buy and sell bitcoin to users of its cash app. This feature has already resulted in over $100 million of additional revenue for the company.
Many analysts have continued to note that although we expect double-digit growth for Square into 2020, the stock is still being traded at a price that is higher than its supposed worth. While this is a caution to watch out for, with its expansion into Bitcoin business and intentions to make fiat currency more readily accepted by merchants across the globe we can expect it’s growth will still be promising. We can also expect that this might give Square the leg up on all of its competitors.
As the 7th largest IT services provider, we figure Fujitsu earned its rightful place in our top blockchain stocks to buy. Fujitsu’s initiatives in the blockchain are evident in the development of the transfer settlement system for the Japanese Bankers Association. It is also seen in services that help companies implement blockchain solutions quicker than ever before. If this wasn’t convincing enough, the company also recently opened the Blockchain Innovation Center in Belgium. Like anything, diversification is key. This means adding stock with business far from home might be great to balance out some of the uncertainty in your local community.
While there have been some questions about whether this stock is a buy, sell or hold. The stock is currently in an upward trend in which some predictions have suggested it will continue to rise over the next few months with another double-digit increase in price. This means investor, you can likely capture some of these profits.
Yes, you saw this correctly. We know this one is a little hard to believe since the presence of blockchain has suggested that Mastercard could become obsolete one day. However, Mastercard has decided to instead leverage this threat and make it work for them.
Additionally, we believe that Mastercard won’t be going anywhere since they have secured several blockchain-related patents of their own. Mastercard has always been and for the foreseeable future will continue to be a good investment especially with its expansion into new markets such as China being on the horizon.
Although the company has already seen a 58.58% increase in the stock price in 2019, this does not mean that it’s too late for you to jump on the Mastercard bandwagon. The company has also recognized that it must do more than remain in just the credit card business and has continued in diversifying its offerings through acquisitions such as their $3.2 billion dollar deal for Net’s account-to-account business. With this in mind, it is only a matter of time before we foresee a blockchain acquisition going through.
6. TrueTrace Technologies
This Canadian stock might be a bit of a wildcard but we wanted to include it in the list anyway. Canadian companies use TrueTrace Technologies to develop blockchain software for the cannabis sector through StrainSecure. As regulations surrounding the Cannabis industry continue to adjust, we know that Canada is just the beginning. The United States also provides many opportunities for growth that we know TrueTrace Technologies will be quick to leverage.
While the Company has shown some success within Canada leveraging strategic partnerships including Shoppers Drug Mart, Deloitte, Aphria, Tilray, Segra International and Anandia. Most notable is likely Shoppers Drug Mart in Canada which is the largest pharmacy chain in Canada. This is promising for future growth potential as success here, will likely mean more partnerships down the road.
As a result, the company has seen a steady increase in profits each quarter which will believe will continue to translate in increased stock prices.
Overstock is heavily invested in the success of blockchain as evident by its subsidiary Medici Ventures whose profits are recorded under tZero. Not only this but CEO, Patrick Byrne even admitted his firm was going to sell a portion of its retail business to finance crypto ventures. Some have been a little bit skeptical about this buy. The company was also the first U.S. retailer to accept bitcoin as a method of payment suggesting that a large portion of this market will continue to be loyal to Overstock.com.
That said a couple of cautions have been brought to the attention of investors. Even if their efforts to leverage blockchain fail, the company still has enjoyed single-digit growth year after year. So, as a short term buy Overstock might still be okay!
Alibaba might just have an advantage as the most patented company in the blockchain world, which is quite the accomplishment in our books. As a patent leader, profits will still be made through licensing agreements which means continuous profits for the company. We don’t have to look back in history to notice the stock has been viewed as a good buy since its IPO in 2014. With the stock on a continuous profitability streak, it is key to get in at the right time to avoid overinflated prices. Coronavirus has influenced Chinese stocks for the worse, however, Alibaba is still pretty stable facing only a slight dip. If this dip continues to grow deeper we can be hopeful that a good time to enter this stock might be closer than we think.
From a less technical standpoint, we can see the actions of Chinese company Alibaba match the American company Amazon. This proves well as Amazon continues to dominate each market it enters, which would suggest on the other side of the world Alibaba could do the same. They have continued to see success in similar areas such as cloud computing and food delivery, while continuing to diversify into other markets such as blockchain. Sound familiar?
9. Bank of America
Standing with the leaders of blockchain patents is the Bank of America. The company has also made several large investments into the maintenance of blockchain technology. One of these investments included the addition of new skilled staff to join the Bank of America team. Investors currently believe this stock is greatly undervalued. This means it is only a matter of time before we can expect a price increase.
Double-digit growth is expected and can be largely attributed to the prospect of big growth opportunities. Additionally, the Bank of America continues to operate with a reasonable debt level. This suggests that their financials are still in check despite their expansion into new business areas.
Do Your Research
You might have noticed that few of the smaller players have cracked our list of best blockchain stocks this time around. There is a reason for that. With many of the big players in tech and finance investing in blockchain, acquisitions are occuring at a more and more frequent rate. This has given larger players an advantage in some of the niche areas that were previously occupied by smaller competitors.
If you happen to be an avid follower of the Hedgetrade blog you’ve likely heard us say time and time again these are only recommendations and are by no means a be all end all guide to investing. This means, (yes you guessed it) you will need to do your own research and make your own determinations. This review is a great place to start your research to ensure your funds remain SAFU.
Once you have a plan in place, trust yourself. You’ve done your research and we would hate to see you fall victim to good old trading psychology.
Read more about stock trading in our article: 7 Best Stocks to Short