The smartest way to buy blockchain stocks
Okay, I get it. You heard about the kid who threw his tax return at an obscure cryptocurrency and became an overnight billionaire… with a “B” not an “M”. Kind of makes you want to take that $1k you’ve had rotting away in the savings account and roll the dice yourself. I mean, if Mikey Millennial can make it rich with cryptos and NFTs, why can’t you? You like Lambos too.
Don’t forget that this isn’t the first time this kind of crypto craze has hit the streets. The public became familiar with cryptocurrency during its major boom cycle in December 2017. Bitcoin prices had risen from under $2,000 in July 2017 to nearly $20,000.
Fast forward to today and you hear more blowouts than blowouts. That means the landscape is more treacherous than ever. Have you heard about the Luna-Terra Stablecoin debacle? It cost crypto holders billions of dollars alone. For every get rich story, there are dozens of scams to hear about. It may sound like an easy road to riches, but there is no easy way out.
Prices have suffered as a result. BTCUSD is now trading below $20,000, close to levels it traded at in late 2020. Other major cryptocurrencies such as ETHUSD have also been hit. ETHUSD is near $1,600, which is far from the highs above $4,800. Investors looking to “Buy the Dip” may be tempted at these levels.
If you are thinking of diving in head first and throwing caution to the wind. Please…DON’T DO IT!
You don’t have to have a gambler’s risk tolerance or be a cryptocurrency expert to profit from the boom in Bitcoin, Ethereum, Solana and others. You don’t even have to believe in the long-term sustainability of any of these coins. You just have to recognize the game and find a way to profit from the underlying technology. The underlying technology, which powers every cryptocurrency on earth, is the blockchain.
If you’ve been paying attention to the headlines, you’ll see that both central banks and major retail banks have changed their tune on cryptocurrencies. At first they scoffed and called them irrelevant. But recently the discussion has changed and now they are recognizing the threat cryptocurrencies bring to their businesses. What they are really saying is that blockchain is revolutionizing the way we process data.
Bitcoin futures contracts have been trading at CME Group for years. Companies have started keeping Bitcoin on their balance sheets, right there next to the US dollar. And now, recently, the SEC has allowed the first Bitcoin ETF to trade publicly. This only adds to the legitimacy of cryptocurrency as an asset class. Nowadays, crypto is not a pie-in-the-sky idea, it is a major financial resource that poses a significant threat to traditional payment companies. As such, it is an exciting opportunity for investors to get in relatively early on in the growth phase of an emerging technology.
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“10 times bigger than the Internet”
Zacks is aiming for big gains from the innovative businesses behind blockchain – the emerging “Internet of Money”. As this technology grows at a projected +2.175% by 2029, shareholders of these companies can make life-changing gains without speculating in volatile cryptocurrencies.
Experts estimate that blockchain technology is “10 times more valuable than the internet.” And just like the early days of internet stocks, the profit potential is huge. This is your chance to see our top picks for capitalizing on this phenomenon.
See our blockchain stocks now >>
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What is Blockchain?
In the digital world, a block is a digital list of records, which acts as a ledger that can contain information of all kinds. Once these blocks are linked together, they are secured with cryptography to form the blockchain. This blockchain is an unforgettable record of all the transactions that are replicated on every computer on the network. If information in a new block cannot be verified by all the other blocks in the chain, it is discarded. When it comes to the best cryptocurrencies, a currency’s network consists of millions upon millions of computers all over the world. This makes hacking impossible, as a hacker would need to hack all the computing power at once, a seemingly impossible task.
I already know I’ve lost some people, but please stay with me. At this point, the question within this topic is typical: What does blockchain have to do with currency? Everything.
But to understand this possibility, we need to separate our thoughts about crypto from traditional fiat currency. While fiat currency is used to buy cryptocurrency, cryptos stand alone once purchased. Additionally, the smart contract (more on this later) aspect allows cryptos to be not just an exchange of cash, but an exchange of value. In a sense, these currencies are the “internet of value”.
To simplify, the blockchain is a public record of assets and transactions that tells us who owns what. These transactions are often referred to as smart contracts, as they record a contract between two people, whether it is a transfer of currency, a good or a service.
You can see how this new innovation could be disruptive to traditional businesses out there. Instead of lamenting this potential disruption, you are in the unique position of profiting from it. How, you ask? By investing in the various areas of the market where the blockchain makes noise. There are several different angles here.
“Picks and Axes”: During the gold rush, it was those who got really rich who sold the pickaxes and axes. That is, the companies that provided the tools for the speculators to go out and try to find the fortune. In the cryptocurrency world, this refers to the companies that make the chips and hardware used for mining.
Advice: There will be a wave of companies looking for ways to incorporate blockchain technology into their existing businesses. Already, large consulting companies are beginning to offer services that help companies integrate the new technology.
Cloud infrastructure: No other industry has been as dependent on the cloud for its development as blockchain. The need to distribute a ledger worldwide, with no centralized ownership or authority overseeing transactions, plays into the cloud’s strength. Companies that offer cloud-based hosting may suffer, while those that help facilitate this decentralized network will greatly benefit.
Payment processing: Among the most disruptive industries for blockchain is payment processing. Instead of your traditional financial intermediary, blockchain technology allows for a distributed, open, public ledger where transactions are verified by other nodes in the chain for a fee that is much less than your typical fees that come from more traditional processors.
Lending: We are only at the tip of the iceberg here on loan. Blockchain technology is perfect for lending, allowing lenders to spread the risk across thousands of loans in an instant, regardless of the size of the lender.
Miners: The miners are the most important part of any blockchain and probably the most misunderstood. Miners confirm transactions from node to node by solving the cryptographic problem and are then rewarded in units of the cryptocurrency. We are already seeing companies “mining” cryptocurrency that are publicly traded. These companies mine the currency and immediately sell it on the open market and transfer the profits to the shareholders. Think of them as a pipeline company in the energy sector. These companies are small now, but could become much larger over time.
Investors/BDC: Some listed companies act as incubators for other budding cryptocurrencies. We talk a lot about Bitcoin, but there are over 6,000 other cryptocurrencies in the world. These investors and business development companies invest in promising crypto companies before they hit the mainstream.
There are many more companies on the way, but how will you know how to separate the pretenders from the challengers? Which of these emerging companies will be built on solid technology and which will be gimmicks? Just as the Dot Com Bubble brought with it more names adding “.com” to their names to get in on the action, companies are adding “Blockchain” to their names, some in a very unscrupulous way.
Find the real blockchain companies today
This technology is already having a major impact on almost every industry you can think of, and that impact will only increase over time. In fact, experts predict the space will skyrocket +2.175% from $7.2 billion in 2022 to $163 billion by 2029.
Just like the early days when the internet was the new emerging technology, investors have a chance to reap big gains. Therefore, I invite you to take a closer look at our portfolio service Blockchain Innovators.
It cuts through the gimmicks and hype to reveal strong, often little-known companies operating blockchain technology – from providing chips and hardware to fintech firms and payment processing.
We look for stocks with explosive profit potential and long-term sustained growth. In fact, the portfolio is currently riding on 7 triple-digit gains reaching as high as +210.3%, +245.3%even +383.8%.¹
Most importantly, there’s still time for you to get in on them because we think all 7 still have a long way to grow.
Today’s unique market environment: Strong economic signals + suppressed share prices
Another reason to invest in blockchain now is that nervous investors have created enticing entry points. Withdrawals and inflation have pushed share prices down. Nevertheless, consumer demand and household income are high, the labor market is flourishing and companies’ earnings are strong.
Huge bargains can be had on selected tickers.
Bonus report: When you look into Blockchain innovatorsyou are also invited to download our recently released special report on another fast-growing industry – NFT Investment guide: 5 surprising choices. “Non Fungible Tokens” are unique and irreplaceable digital assets. This is another slot that has almost unlimited upside. Already at $35 billion in revenue today, NFTs look set to reach $80 billion by 2025.
Your chance to benefit from both Blockchain and NFT ends Sunday 11 Septemberso I highly recommend you look into these potential blockbuster categories right away.
See our Blockchain innovators shares and bonus NFT report now >>
Good investment,
Dave Bartosiak
Dave is Zacks’ resident blockchain expert. A successful early crypto investor, he picks stocks and delivers exclusive commentary on our latest portfolio, Blockchain innovators.
¹ As of 9/6/2022. The results listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research’s newsletter editors.
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